UNIVERSITY  OF  CALIFORNIA 
AT  LOS  ANGELES 


.sT" 


ECONOMIC    MORALISM 


ECONOMIC 
MORALISM 


AN   ESSAY  IN   CONSTRUCTIVE 
ECONOMICS 


BY 

JAMES   HALDANE   SMITH 


NEW   YORK 
THE   MACMILLAN   COMPANY 

1917 


{All  rights  reserved) 


V-IM 


And  may-be  we,  these  days,  have,  too,  our  own  reward — 
(for  there  are  yet  some,  in  all  lands,  worthy  to  be  so 
encouraged).  Though  not  for  us  the  joy  of  entering  at  the 
last  the  conquer'd  city — not  ours  the  chance  ever  to  see 
with  our  own  eyes  the  peerless  power  and  splendid  eclat  of 
the  democratic  principle,  arriv'd  at  meridian,  filling  the  world 
with  effulgence  and  majesty  far  beyond  those  of  past  history's 
kings,  or  all  dynastic  sway — there  is  yet,  to  whoever  is 
eligible  among  us,  the  prophetic  vision,  the  joy  of  being 
toss'd  in  the  brave  turmoil  of  these  times — the  promulga- 
tion and  the  path,  obedient,  lowly  reverent  to  the  voice,  the 
gesture  of  the  god,  or  holy  ghost,  which  others  see  not, 
hear  not — with  the  proud  consciousness  that  amid  whatever 
clouds,  seductions,  or  heart-wearying  postponements,  we  have 
never  deserted,  never  despair'd,  never  abandon'd  the  faith. 

Walt  Whitman. 


5 

208165 


PREFACE 


The  President  of  the  French  Chamber  of  Deputies 
declared  on  December  22,  1914,  that  the  great 
war  being  waged  defensively  by  France  and  her 
Allies  against  the  Teutonic  Powers  was  in  support 
of  the  principle  that  "  right  is  might."  This  prin- 
ciple, as  the  antithesis  of  the  Teutonic  one  that 
"  might  is  right,"  is  admirable.  But  to  make  it 
ethically  effective  the  nations  that  emblazon  it  on 
their  banners  will  have  to  devote  much  considera- 
tion to  its  meaning.  The  war  finished,  ethical 
inquiry  will  receive  such  an  impetus  as  it 
has  perhaps  never  had  in  the  world's  history. 
There  will  be  ardent  and  keen  investigation  into 
the  laws  of  right  conduct  in  every  department  of 
life — right  conduct  between  nations,  right  conduct 
between  races,  sects,  and  political  parties  living 
under  the  same  government,  and,  above  all,  because 
lying  at  the  root  of  all  right  living,  right  conduct 
in  economic  affairs — that  is,  in  the  production  and 
division  of  wealth.  These  are  the  most  momentous 
problems  pressing  upon  the  world's  attention  at 
the  present  time,  and  it  is  owing  to  man's  neglect 
of  them  that  there  has  been  such  intolerable 
suffering  from  war,  poverty,  and  crime. 

7 


Preface 

The  main  purpose  of  this  essay  in  Constructive 
Economics  is  to  adumbrate  the  economic  arrange- 
ments necessary  to  ensure  justice  between  man 
and  man  under  the  system  of  wealth  production 
that  characterizes  modern  civilization.  Efforts  to 
sketch  these  in  even  slight  detail  have  long  been 
discouraged,  especially  by  many  Socialists,  who 
take  the  view  that  all  such  attempts  must  be  un- 
scientific and  Utopian.  These  fatalistic  Socialists 
have  persuaded  themselves,  on  insufficient  grounds 
indeed,  that  the  present  economic  system  will 
necessarily  and  of  its  own  accord  develop  into 
some  kind  of  desirable  Socialism..  Not  only 
Socialists,  however,  but  politicians  of  the  other 
parties  have  adopted  as  their  sole  guiding  political 
principle  and  motto,  Solvltur  Ambulando,  and  try 
to  believe  that  they  thereby  escape  the  respon- 
sibility of  constructing  a  clear  ideal.  But  Herbert 
Spencer  has  exposed  the  fallacy  of  this. 
"  Granted,"  he  says,  "  that  we  are  chiefly  inter- 
ested in  ascertaining  what  is  relatively  right,  it 
still  follows  that  we  must  first  consider  what  is 
absolutely  right,  since  the  one  conception  presup- 
poses the  other.  That  is  to  say,  though  we  must 
ever  aim  to  do  what  is  best  for  the  present  time, 
yet  we  must  ever  bear  in  mind  what  is  abstractedly 
best ;  so  that  the  changes  we  make  may  be  towards 
it,  and  not  away  from  it."  Without  a  clear  ideal, 
social  reformers  are  like  mariners  without  chart 
or  compass — or  worse,  for  they  have  neither  goal 
nor  guide.  Their  policy  is  a  policy  of  drift.  The 
drift  at  present,  dominated  though  it  is  by  Liberals 

8 


Preface 

and  Conservatives,  is  strongly  in  the  direction  of 
Communism.  As,  moreover,  prominent  Socialists 
emphatically  declare  Communism  to  be  their  ideal, 
without,  it  is  to  be  feared,  realizing  its  import, 
and  as  such  a  movement  is  pregnant  with  social 
disaster,  every  effort  must  be  made  to  combat  it. 

While  the  ideal  economic  structure,  the  necessary 
outcome  of  what  Herbert  Spencer  calls  Absolute 
Ethics,  is  dealt  with  in  great  part  in  the  following 
pages,  it  is  also  attempted  to  make  the  ethical 
basis  clear,  for  it  is  important  to  keep  steadily 
before  ourselves  the  necessity  of  the  application 
of  morality  to  economic  life,  and  because  the  dis- 
cussion of  first  principles  has  been  neglected,  with 
disastrous  effects.  The  chapters  on  the  ideal 
economic  framework  may  perhaps  appear  to  the 
superficial  observer  to  deal  with  a  system  too 
remote  from  actuality  to  be  of  practical  interest. 
But  all  ideals  have  this  appearance.  And  yet 
ideals  are  necessary.  It  is  admitted,  however,  that 
the  value  of  an  ideal  is  never  fully  appreciated 
until  its  practicability  is  demonstrated  and  the 
course  of  the  development  from  the  actual  made 
clear.  "Les  homines  n'ont  qii 'indifference  et  dedain 
pour  les  idees  pares."  It  is  therefore  desirable 
to  chart  out  the  most  practicable  course  in  the 
transition  to  the  ideal.  This  does  not  call  for 
prophetic  powers,  for  it  is  a  problem  in  ethics 
applied  to  economics,  a  problem  in  social  dynamics. 
It  deals  only  with  what  ought  to  be,  and  what  must 
be  if  any  change  for  the  better  is  to  be  made. 
It   deals  with   the   necessary   economic    rearrange- 

9 


Preface 

ment.  It  is  a  scientific  problem,  and  it  can  be 
discussed  with  scientific  detachment.  But  linked 
up  with  the  purely  ethical  and  economic  questions 
is  the  question  of  the  methods  to  be  employed  in 
making  the  economic  changes.  These  methods 
will  depend  on  the  strength  of  the  various  re- 
actionary forces,  and  will  have  continually  to  be 
altered  in  accordance  with  the  exigencies  of  the 
times.  The  difficulty  lies  in  the  impossibility  of 
knowing  what  political  or  economic  currents  or 
terrific  reactionary  storms  may  sweep  us  from  our 
intended  course,  and  necessitate  a  serious  modifi- 
cation of  our  plans.  Broadly,  our  chief  hope  lies 
in  holding  to  our  ideal  and  in  making  straight 
for  our  goal  from  whatever  point  to  which  we 
may  be  driven,  following  closely  the  line  of  least 
resistance. 

This  economic  evolution,  based  on  what  Spencer 
calls  Relative  Ethics,  requires  to  be  dealt  with 
exhaustively.  But  the  practical  proposals  for  the 
transition  period  on  the  lines  herein  advocated 
would  require  for  full  and  adequate  treatment  a 
lengthy  treatise.  Unfortunately,  the  discussion  of 
this  subject  must  for  the  present  be  confined 
within  the  narrow  limits  of  the  concluding  chapter. 
Neither  is  it  possible  to  criticize  in  this  volume 
the  changes  of  the  economic  system  at  present 
in  process  and  the  reforms  recognized  as  about 
to  come  within  the  sphere  of  practical  politics, 
all  of  which  must  be  considered  in  the  light  of 
the  ideal  and  supported  or  resisted  in  so  far  as 
they  are  likely  to  lead  to  or  from  that  ideal.     Nor 

10 


Preface 

is  there  space  here  to  demonstrate  the  superiority 
of  the  ideal  economic  system  over  the  present 
system  in  the  matter  of  economies  of  all  kinds. 
But  every  one  with  an  adequate  knowledge  of  the 
present  system  will  recognize  how  extraordinarily 
simple  the  moralist  system  is  in  comparison  with 
it,  not  only  in  industrial  matters  but  in  banking 
and  finance,  in  law,  insurance,  and  accounting. 
As  regards  the  ideal  social  state,  no  attempt  is 
made  in  this  volume  to  discuss  the  far-reaching 
effects  of  a  moralized  economic  system  on  religion, 
art,  and  science,  on  social  life,  on  the  family,  or 
the  individual.  This  essay  deals  with  economic 
construction  alone  and  its  ethical  basis,  the  ideal 
economic  framework  being  sketched  only  in  its 
salient  features,  and  principles  dealt  with  rather 
than  details. 

For  this  generation  the  outstanding  and  solemn 
truth  is  that  the  present  economic  system  stands 
condemned.  With  the  growth  of  new  ideals  among 
all  classes,  nothing  short  of  a  complete  economic 
revolution  will  for  long  be  tolerated.  It  behoves 
every  reformer,  therefore,  to  assist  in  finding  the 
answer  to  the  momentous  question,  What  is  to 
be  the  economic  framework  of  the  new  social 
order?  The  old  order  must  go;  what  is  to 
replace  it?  If  this  book  proves  to  be  even  to 
a  slight  extent  a  suggestive  contribution  to  the 
discussion  of  that  question,  the  aim  of  its  author 
will  have  been  attained. 

J.    HALDANE   SMITH. 


Preface 

P.S. — Since  the  above  was  written  events  have 
forced  all  the  belligerent  States  of  Europe  to 
organize  their  industrial  resources  to  a  large  extent 
on  a  collectivist  basis.  This  has  been  especially 
the  case  with  Germany.  A  statement  is  made, 
emanating  from  a  German  source,  that  "  the  war 
controlled  by  German  militarism  has  led  to  such 
continual  regulation  of  living  conditions  by  the 
Government  that  a  Socialistic  State  is  in  process 
of  development  in  Germany,  the  Government  con- 
trolling the  grain,  potatoes,  railways,  and  60  per 
cent,  of  the  factories,  besides  fixing  the  general 
food  prices  for  the  community."  In  Great  Britain 
and  France  steps  in  the  same  direction  are  being 
taken.  In  fact,  the  individualist,  competitive, 
capitalist  system,  which  has  for  long  been  con- 
demned by  competent  observers,  is  now  recog- 
nized in  practice  by  the  Governments  of  these 
States  to  be  an  impossible  economic  system  under 
pressure  of  war.  It  is  equally  indefensible  in 
peace,  and  this  will  soon  be  generally  admitted, 
especially  in  the  new  and  trying  conditions  that 
will  rule  after  the  war.  More  than  ever  should 
attention  be  given  to  ethico-economic  first  prin- 
ciples for  the  solution  of  both  immediate  and  future 
problems. 

J.  H.  S. 


1-' 


CONTENTS 


PREFACE 


PART   I 
THE    ETHICAL    BASIS 

CHAPTER 

I.      ETHICAL  FIRST  PRINCIPLES  IN  THEIR  APPLICATION 

TO   ECONOMICS  .  .  .  19 

II.      RENT,     INTEREST,    AND    PROFIT    ETHICALLY   CON- 
SIDERED .  .  .  .  .60 

III.      THE    ERRORS   AND   DANGERS   OF   SOCIALISM  .         85 


PART    II 

THE    ECONOMIC    FRAMEWORK 

SECTION    I 
THE   IDEAL:    BASED    ON  ABSOLUTE   ETHICS 

IV.      PUBLIC    OWNERSHIP    OF   THE    MEANS   OF    PRODUC- 
TION .  .  .  .  .  .125 

13 


Contents 


CHAPTER  PAGE 

V.       PRIVATE    PROPERTY  ....  145 

VI.       RENEWAL   AND    RAISING    OF    INDUSTRIAL   CAPITAL  1 55 

VII.      THE      EQUITABLE      DISTRIBUTION      OF      ECONOMIC 

RENT  .  .  .  .161 

VIII.      FOREIGN   TRADE  AND    PROTECTION  .  .  184 

IX.      CONDITIONS   AND   REMUNERATION    OF    LABOUR       .  1 95 

X.      NATIONAL    INSURANCE         .  .  .  .  2l6 

XI.      TAXATION  :    LEGITIMATE   AND    ILLEGITIMATE  .  224 

SECTION    II 
THE    PRACTICAL:    BASED    ON  RELATIVE   ETHICS 

XII.      THE   TRANSITION    TO    ECONOMIC    MORALISM  .  247 

INDEX         ......  285 


M 


The  climax  of  this  loftiest  range  of  civilization,  rising  above 
all  the  gorgeous  shows  and  results  of  wealth,  intellect, 
power,  and  art,  as  such — above  even  theology  and  religious 
fervor — is  to  be  its  development,  from  the  eternal  bases, 
and  the  fit  expression,  of  absolute  Conscience,  moral  sound- 
ness, Justice.  Even  in  religious  fervor  there  is  a  touch 
of  animal  heat.  But  moral  conscientiousness,  crystalline, 
without  flaw,  not  Godlike  only,  entirely  human,  awes  and 
enchants  forever.  Great  is  emotional  love,  even  in  the 
order  of  the  rational  universe.  But,  if  we  must  make  grada- 
tions, I  am  clear  there  is  something  greater.  Power,  love, 
veneration,  products,  genius,  esthetics,  tried  by  subtlest  com- 
parisons, analyses,  and  in  serenest  moods,  somewhere  fail, 
somehow  become  vain.  Then  noiseless,  with  flowing  steps, 
the  lord,  the  sun,  the  last  ideal  comes.  By  the  names  right, 
justice,  truth,  we  suggest,  but  do  not  describe  it.  To  the 
world  of  men  it  remains  a  dream,  an  idea,  as  they  call  it. 
But  no  dream  is  it  to  the  wise — but  the  proudest,  almost 
only  solid  lasting  thing  of  all.  Its  analogy  in  the  material 
universe  is  what  holds  together  this  world,  and  every  object 
upon  it,  and  carries  its  dynamics  on  forever  sure  and  safe. 
Its  lack,  and  the  persistent  shirking  of  it,  as  in  life,  sociology, 
literature,  politics,  business,  and  even  sermonizing,  these 
times,  or  any  times,  still  leaves  the  abysm,  the  mortal  flaw 
and  smutch,  mocking  civilization  to-day,  with  all  its  in- 
question'd  triumphs,  and  all  the  civilization  so  far  known. 

Walt  Whitman. 


16 


PART    I 
THE    ETHICAL    BASIS 


17 


ECONOMIC    MORALISM 


CHAPTER    I 

ETHICAL   FIRST   PRINCIPLES   IN   THEIR 
APPLICATION   TO   ECONOMICS 

Our  present  purpose  is  to  examine  the  ethical 
basis  of  property-holding  and  division  of  wealth. 
The  practical  value  of  such  an  investigation  may- 
seem  to  some  comparatively  insignificant  and  its 
interest  mainly  academic.  Proposals  for  economic 
change  are  considered,  and  will  continue  to  be 
considered,  by  the  contemporary  moral  sense  of 
the  community,  on  their  obvious  merits,  on  their 
probable  effect  on  the  well-being  of  the  community 
if  immediately  applied,  and  without  reference  to 
their  place  in  a  scientific  system  of  ethics.  Scien- 
tific completeness  of  theory  more  often  follows 
than  precedes  practical  action.  Nevertheless,  as 
many  of  such  proposals  are  so  frequently  con- 
demned on  the  ground  of  their  alleged  contra- 
vention of  the  laws  of  morality,  it  is  necessary  to 
demonstrate  that  those  advocated  in  these  pages 
have  a  firm  foundation  on  these  very  laws.  More- 
over,   such   a   demonstration   gives   scientific   value 

19 


Economic   Moralism 

to  proposals  of  this  kind,  and  consequently  assists 
those  very  valuable  intellects  who  seek  the 
guidance  of  principle. 

In  this  investigation  we  have  to  deal,  not  with 
all  the  laws  of  conduct  but  only  those  concerned 
with  economics — that  is,  with  what  has  been  called 
"  the  main  part  of  the  great  social  interchange  of 
services  " — and  we  have  to  trace  these  laws  back 
to  the  first  principles  of  ethics.  We  have  to  avoid 
the  psychological,  ontological,  and  metaphysical 
speculation  in  which  most  exponents  of  ethics  have 
got  inextricably  entangled.  We  are  not  concerned 
with  motives  and  dispositions,  but  with  the  con- 
sequences of  action.  As  Professor  Fowler  says  in 
his  "Progressive  Morality":  "Vague  theories, 
couched  in  unintelligible  or  only  half-intelligible 
language,  and  almost  totally  inapplicable  to  prac- 
tice, have  usually  done  duty  for  what  is  called 
a  system  of  moral  philosophy.  The  authors  or 
exponents  of  such  theories  have  the  good  fortune 
at  once  to  avoid  odium  and  to  acquire  a  reputa- 
tion for  profundity."  The  neglect  of  the  ethics 
of  economics  by  the  recognized  exponents  of 
ethics  is  forced  upon  the  notice  of  the  inquirer, 
and  is  discreditable  in  view  of  the  supreme  im- 
portance of  the  subject.  The  greater  part  of  man's 
life  is  given  up  to  the  production  of  material 
wealth,  the  performance  of  services,  and  their 
exchange,  and  yet  practically  no  attention  is  paid 
by  the  authorities  on  ethics  to  the  laws  that 
ought  to  regulate  the  conditions  under  which  each 
individual  contributes  his   labour  and  receives  his 

20 


Ethical   First  Principles 

share  of  wealth  and  services.  What  is  a  just 
wage;  what  is  a  fair  bargain  or  exchange  ; 
whether  rent,  interest,  and  profit  are  justifiable — 
these  are  some  of  the  most  important  questions 
pressing  for  solution,  and  they  are  sedulously- 
avoided   in  orthodox   ethical   exposition. 

The  ethical  laws  bearing  on  the  physical  basis 
of  life  must  have  our  first  consideration.  We 
aim  at  discovering  the  principles  of  the  just, 
fair,  right,  or  morally  justifiable  apportion- 
ment, distribution,  or  division  of  material 
wealth.  When  these  are  discovered,  the  method 
of  property-holding  required  for  the  effective 
realization  of  such  apportionment  will  become 
clear,  and  will  be  found  to  be  determined  at 
any  period  by  the  stage  of  the  economic  develop- 
ment at  that  period.  What  we  are  especially  con- 
cerned with  in  this  place  is  that  section  of  morality 
which  deals,  not  with  the  self-regarding  duties, 
important  as  these  are,  but  only  with  certain  of 
the  duties  to  others — that  is  to.  say,  not  with  the 
conduct  conducive  to  personal  health  and  happi- 
ness, not  even  with  the  ethics  of  social  intercourse 
or  duties  to  others  in  general,  but  solely  with  the 
ethics  of  the  division  of  wealth.  With  the  approach 
to  just  division,  the  self-regarding  virtues  become 
relatively  of  greater  importance,  the  ethico- 
economic  problem  then  becoming  one  regarding 
the  kind  of  wealth  it  is  wise  for  the  individual  to 
demand  and  the  best  way  of  using  or  consuming  it. 

For    a    Robinson    Crusoe    alone    on    his    island 
21 


Economic   Moralism 

there  is,  of  course,  no  problem  of  the  division  of 
wealth.  But  if  his  island  is  overrun  by  a  ship- 
wrecked crew,  Crusoe  is  no  longer  monarch  of 
all  he  surveys.  The  bounty  of  Nature  must  be 
shared  with  others,  and  the  product  of  joint  or 
co-operative  labour  divided.  There  is  a  right  way 
and  a  wrong  way,  a  just  way  and  an  unjust  way,  of 
doing  this,  and  ethics  aims  at  discovering  the  right 
way.  The  moralist  must  define  the  principles 
according  to  which  the  rightful  share  of  the 
bounty  of  Nature  and  of  the  products  of  labour 
due  to  each  individual  is  to   be  ascertained. 

The  right  way  of  ordering  economic  life,  as  is 
now  to  be  proved,  is  that  which  places  the  able- 
bodied  individuals  composing  the  community  on 
equal  footing  as  regards  the  opportunity  of 
deriving  benefit  from  Nature  and  from  the  industry 
of  society,  and  which  provides  maintenance  for 
those  unable  to  provide  it  for  themselves.  The 
only  possible  point  of  dispute  in  the  proposition 
is  the  equality  of  the  treatment.  But  the  applica- 
tion of  Bentham's  principle  of  "  everybody  to 
count  for  one,  and  nobody  for  more  than  one  " 
cannot  be  seriously  disputed.  On  what  grounds 
can  equality  be  disapproved  of?  As  most  moralists 
agree,  equality  appears  to  all  as  "  reasonable." 
It  is  an  axiom  of  morals.  Despite  the  gross  in- 
equality of  opportunity  generally  borne  with  in 
all  stages  of  social  evolution,  the  sentiment  that 
such  inequality  is  unjust  has  always  existed. 
Unless,  therefore,  a  cogent  reason  against  equality 
can  be   adduced — and   it  has  never  been  seriously 

22 


Ethical  First  Principles 

attempted  except  by  Nietzsche — the  principle  must 
stand.  It  is  beginning  to  be  recognized  that  the 
universally  accepted  principle  of  the  equality 
of  men  before  the  law  must  be  extended  to  the 
economic  field.  If  individuals  ought  to  have  un- 
equal treatment,  the  principle  of  such  treatment 
must  be  formulated,  as  without  a  principle  morality 
disappears,  and  the  result  is  a  brute  struggle 
for  superior  benefits  and  advantages.  Morality  pro- 
vides a  principle  of  conduct  to  obviate  the  struggle. 
The  obvious  intention  of  morality  is,  as  Bain 
says,  the  good  of  mankind.  Human  welfare  is 
the  ethical  end,  and  every  one  ought  to  have  an 
equal  opportunity  of  achieving  personal  well-being. 
There  can  be  no  other  ethical  end  than  human 
happiness,  not  happiness  for  self  alone,  or  happi- 
ness for  others,  or  even  the  greatest  happiness  of 
the  greatest  number,  but  happiness  for  all  justly 
meted  out.  The  question  resolves  itself  into  that 
of  the  relative  importance  of  self  and  others,  into 
that  of  the  extent  to  which  self  is  to  be  subordi- 
nated.    That  is  the  central  problem  of  ethics. 

The  happiness  of  mankind,  how  is  it  attain- 
able? What  is  the  truly  good?  All  persons  are 
not  constituted  alike.  Having  different  tastes,  they 
seek  different  forms  of  happiness.  The  search 
for  happiness  must  therefore  be  left  to  the  indi- 
vidual. No  one  else  can  choose  it  for  him. 
Individuals  in  their  search  may  take  lessons  from 
the  experience  of  others,  but  they  must  be  left 
free  to  pursue  it  in  their  own  way. 

23 


Economic  Moralism 

Every    one    has    as    good    a    right    to    live    as 
another.      This    implies    with    logical   certitude    an 
equal    right    to   the   means   of    life   and  happiness. 
The    means    of    life    are    what    Spencer    calls    the 
natural  media  and  the  tools  or  machinery  of  pro- 
duction   and   exchange.      Primitive   man,   with   his 
mode  of  life  approximating  to  that  of  the  animals, 
lives    practically    from    hand    to    mouth,    and    the 
simple  nature  of  the  methods  of  production  renders 
access  to  the  means  of  life  easy.     But  as  civiliza- 
tion progresses,  the  mode  of  gaining  a  livelihood 
changes.      It    becomes    more   complicated    as    the 
means  of  production  become  more  expensive,  and 
have  necessarily  to  be  held  as  collective  property. 
The  factory  and  the  railway  are  as  indispensable 
to  modern  man   as  the  bow  and  arrow  to   primi- 
tive man.    Every  one,  then,  must  have  inalienable 
and  equal   rights  of  access   to   the  natural  media 
and  the  contemporary  means  of  production;     and 
in  modern  civilization  this,  it  is  self-evident,  can  be 
rendered  possible  in  no  other  way  than  by  having 
these  held  as  public  property,  necessarily,  as  will 
be  shown  later,  unencumbered  with  debt  on  which 
interest  has  to  be  paid. 

Let  us  go  into  these  questions  in  some  detail. 
Perhaps  the  most  effective  work  that  can  be  done 
in  placing  Constructive  Economics  on  its  ethical 
basis  is  to  accept  the  first  principles  of  ethics  as 
expounded  by  Herbert  Spencer,  who  with  all  his 
shortcomings  has  not  been  equalled  as  an  exponent 
of   ethics    in    the    light   of   modern   knowledge   and 

24 


Ethical   First  Principles 

method,  and  upon  these  principles  build  up  the 
economic  system  of  the  future,  not,  however,  with- 
out criticism  of  certain  of  his  deductions  from 
the  principles  he  enunciates. 

In  dealing  with  ethics  it  is  important  to  keep 
in  mind  the  distinction  between  what  Spencer  terms 
Absolute  Ethics  and  Relative  Ethics.  The  first 
deals  with  the  ideal,  the  second  with  the  imme- 
diately practicable.  As  Spencer  says  :  "  Progress- 
ing civilization,  which  is  of  necessity  a  succession 
of  compromises  between  old  and  new,  requires  a 
perpetual  readjustment  of  the  compromise  between 
the  ideal  and  the  practicable  in  social  arrange- 
ments; to  which  end  both  elements  of  the  com- 
promise must  be  kept  in  view.  If  it  is  true  that 
pure  rectitude  prescribes  a  system  of  things  far 
too  good  for  men  as  they  are,  it  is  not  less  \true 
that  mere  expediency  does  not  of  itself  tend  to 
establish  a  system  of  things  any  better  than  that 
which  exists.  While  absolute  morality  owes  to 
expediency  the  checks  which  prevent  it  from 
rushing  into  Utopian  absurdities,  expediency  is 
indebted  to  absolute  morality  for  all  stimulus  to 
improvement.  Granted  that  we  are  chiefly  in- 
terested in  ascertaining  what  is  relatively  right, 
it  still  follows  that  we  must  first  consider  what  is 
absolutely  right,  since  the  one  conception  presup- 
poses the  other.  That  is  to  say,  though  we  must 
ever  aim  to  do  what  is  best  for  the  present  time, 
yet  we  must  ever  bear  in  mind  what  is  abstractedly 
best,  so  that  the  changes  we  make  may  be  towards 
it,   and  not   away  from   it." 

25 


Economic  Moralism 

We  must  bear  in  mind  that  although  the  ideal 
economic  system  is  what  we  strive  to  attain  to, 
and  although  we  must  try  to  get  the  clearest 
possible  view  of  our  goal,  there  will  be  called 
for  in  the  intermediate  stages  many  economic 
arrangements  that  will  seem  to  conflict  with  funda- 
mental principles,  and  that,  in  fact,  would  not 
be  tolerated  in  the  ideal  system.  Many  regulations, 
both  governmental  and  trade  union,  are  only 
tolerated  now  to  avoid  greater  evils.  They  are 
necessary  in  the  present  transitional  system,  in 
which  conduct  must  be  based  on  relative  ethics. 
For  example,  a  differentiated  and  graduated 
income-tax  is  only  justifiable  because  inequality 
of  income  at  the  present  day,  it  is  tacitly  recog- 
nized, is  not  based  on  justice  but  injustice;  the 
tax  is  an  accepted  means  of  rectifying  to  some 
extent  the  inequitable  distribution  of  wealth. 
Similarly  with  trade  union  pressure  upon  non- 
unionists  to  join  the  unions  and  abide  by  the 
corporate  arrangements  regarding  wages  and  con- 
ditions of  labour  and  methods  of  action ;  corporate 
or  collective  bargaining  and  action  are  necessary 
now  for  the  workers  over  against  the  classes  who 
own  the  land  and  the  means  of  production  and 
who  are  therefore  so  powerful.  But  under  the 
ideal  system  the  conditions  would  be  changed. 

Spencer  himself  does  not  quite  grasp  the  full 
import  of  his  proposition  regarding  Relative 
Ethics.  He  says,  for  example,  that  many  in  our 
days  are  seeking  to  override  the  right  of  property, 
and  to  strive  after  "  the  equal  division  of  unequal 

26 


Ethical  First  Principles 

earnings,"  to  make  the  many  inferior  profit  at 
the  expense  of  the  few  superior.  He  overlooks 
the  fact  that  much  of  what  he  complains  of  is 
called  for  because  "  the  unequal  earnings  "  have 
not  been  justly  earned,  and  that  the  so-called 
"  superior  "  are  only  superior  in  the  sense  that 
they  have  superior  economic  powers  over  the  many 
supposed  to  be  otherwise  inferior  to  them.  Relative 
Ethics,  it  would  seem,  would  here  justify  such 
action.  Spencer,  however,  maintains  not  only  that 
the  Right  of  Property  is  asserted  by  Absolute 
Ethics,  but  that  no  breach  of  it  "  is  warranted 
by  that  relative  ethics  which  takes  account  of 
transitional  needs,"  except  "  such  limitation  as  is 
required  for  defraying  cost  of  protection,  national 
and  individual."  He  neglects  to  support  this 
assertion  by  any  argument,  although  it  seems 
obvious  that  property  must  have  a  different  ethical 
position  in  the  period  of  transition  from  that  in 
the  ideal  state.  If  the  present  competitive  system, 
based  on  private  property  in  the  natural  media 
(as  Spencer  calls  the  earth  and  all  that  in  nature 
appertains  to  it)  and  in  the  instruments  of  pro- 
duction essential  in  our  highly  developed  economic 
system,  results  in  gross  injustice  in  distribution 
of  wealth  and  conditions  of  labour  through  the 
resulting  inequality  of  opportunity,  as  it  does, 
Relative  Ethics  certainly  justifies  interference  with 
property  as  it  exists  in  such  a  system. 

Having  thus   cleared  the  way,   let  us  now  deal 
with  Absolute  Ethics,  and  examine   "  the  ultimate 

27 


Economic  Moralism 

ethical  principle  "  as  enunciated  by  Spencer,  who, 
unfortunately,   in   its   formulation   strains   after   the 
succinct  and  the  quintessential,  with  the  result  that 
the    formula    loses    strength    and    definiteness.       It 
runs:     "Every  man  is   free  to   do   that  which  he 
wills,    provided    he    infringes    not    the    equal   free- 
dom   of    any    other    man."      This    Law    of    Equal 
Freedom,  as  it  is  called,  requires  some  exposition. 
Spencer    recognizes    this,    and    to    guard    against 
possible   misapprehension,   explains   that    "  each   in 
carrying  on   the   actions   which   constitute   his   life 
for    the    time    being,    and    conduce    to    the    subse- 
quent maintenance  of  his  life,  shall  not  be  impeded 
farther  than  by  the  carrying  on  of  these  kindred 
actions    which    maintain   the    lives    of    others.       It 
does    not    countenance    a    superfluous    interference 
with  another's  life,  committed  on  the  ground  that 
an    equal   interference    may    balance    it."      Again, 
he   says:     "If  we  bear  in   mind  that  though  not 
the  immediate  end,  the  greatest  sum  of  happiness 
is  the  remote  end,  we  see  clearly  that  the  sphere 
within    which    each    may    pursue    happiness    has    a 
limit,  on  the  other  side  of  which  lie  the  similarly 
limited  spheres  of  action  of  his  neighbours ;     and 
that  he  may  not  intrude  on  his  neighbours'  spheres 
on  condition  that  they  may  intrude  on  his.    Instead 
of  justifying  aggression  and  counter-aggression,  the 
intention  of  the  formula  is   to   fix  a  bound  which 
may  not  be  exceeded  on  either  side."     The  mean- 
ing of  the  law  is  made  clearer  still  by  a  remark 
in     his     chapter    on     Sub-human     Justice:      "The 
necessity  for  observance  of  the  condition  that  each 

28 


Ethical   First  Principles 

member  of  the  group,  while  carrying  on  self- 
sustentation  and  sustentation  of  offspring,  shall  not 
seriously  impede  the  like  pursuits  of  others,  makes 
itself  so  felt,  where  association  is  established,  as 
to  mould  the  species  to  it."  This  law  of  "  Sub- 
human Justice,"  that  each  must  have  equal  oppor- 
tunity of  self-sustentation  and  sustentation  of 
offspring,  is  not  abrogated  by  "  Human  Justice." 
The  Law  of  Equal  Freedom  is  really  a  refined 
version  of  it,  and  requires  to  be  interpreted  in  its 
light. 

With  regard  to  the  authority  of  the  formula, 
Spencer  asserts  that  this  principle  of  natural  equity 
is  not  an  exclusively  a  priori  belief.  "  Though, 
under  one  aspect,  it  is  an  immediate  dictum  of 
the  human  consciousness  after  it  has  been  subject 
to  the  discipline  of  prolonged  social  life,  it  is, 
under  another  aspect,  a  belief  deducible  from  the 
conditions  to  be  fulfilled,  firstly  for  the  main- 
tenance of  life  at  large,  and  secondly  for  the 
maintenance  of  social  life."  He  maintains  that 
no  higher  warrant  can  be  imagined,  and  that  it 
gives  the  Law  of  Equal  Freedom  an  authority 
transcending  every  other.  These  a  priori  beliefs 
entertained  by  men  at  large  must  have  arisen,  if 
not  from  the  experiences  of  each  individual,  then 
from  the  experiences  of  the  race,  and,  moreover, 
they  are  confirmed  by  induction. 

This  formula,  in  which  what  Spencer  calls  the 
true  conception  of  justice  is  framed,  is  constructed 
by  co-ordinating  what  he  calls  the  antagonistic 
wrong  views,  in  conformity  with  a  method  he  has 

29 


Economic   Moralism 

applied  in  other  fields  of  thought.  He  calls 
attention  to  the  conception  of  justice  held  in  earlier 
times,  in  which,  he  says,  the  idea  of  inequality 
unduly  predominates,  and  to  the  conception  of 
justice  held  in  our  own  days  by  men  like  Mill  and 
Bentham,  in  which,  as  he  considers,  the  idea  of 
equality  unduly  predominates.  He  does  not  agree 
with  Bentham's  principle — "  Everybody  to  count 
for  one,  nobody  for  more  than  one";  nor  with 
Mill's — "  One  person's  happiness  ...  is  counted 
for  exactly  as  much  as  another's."  He  mistakenly 
believes  that  these  principles  lead  straight  to 
Communism.  He  even  looks  askance  at  Kant's 
famous  universal  principle  of  right,  to  which  his 
own  bears  such  a  striking  resemblance — "  Act 
externally  in  such  a  manner  that  the  free  exercise 
of  thy  will  may  be  able  to  co -exist  with  the 
freedom  of  all  others  according  to  a  universal 
law  " — on  the  ground  that  this  assumes  the  welfares 
of  other  men  to  be  considered  as  severally  of 
like  values  with  the  welfare  of  the  actor.  He 
says:  "If  each  of  these  opposite  conceptions  of 
justice  is  accepted  as  true  in  part,  and  then  supple- 
mented by  the  other,  there  results  that  conception 
of  justice  which  arises  on  contemplating  the  laws 
of  life  as  carried  on  in  the  social  state.  The 
equality  concerns  the  mutually  limited  spheres  of 
action  which  must  be  maintained  if  associated  men 
are  to  co-operate  harmoniously.  The  inequality 
concerns  the  results  which  each  may  achieve  by 
carrying  on  his  actions  within  the  implied  limits. 
No  incongruity  exists  when  the  ideas   of  equality 

30 


Ethical  First  Principles 

and  inequality  are  applied,  the  one  to  the  bounds 
and  the  other  to  the  benefits.  Contrariwise,  the 
two  may  be,  and  must  be,  simultaneously  asserted." 
Slight  objection  could  be  raised  against  this  view, 
if  the  interpretation  were  that  the  object  to  be 
attained  is  the  equal  opportunity  for  every  one  of 
obtaining  happiness — that  is,  the  securing  of  the 
means  of  happiness  to  every  individual  through 
mutually  limited  spheres  of  action,  leaving  each 
one  to  seek  his  happiness  in  his  own  way  and  to 
be  rewarded  in  proportion  to  his  efforts.  At 
bottom  this  is  probably  what  Spencer  means, 
although  he  distinctly  expresses  himself  other- 
wise when  dealing  with  his  deductions  from  the 
principle. 

The  inequality  he  refers  to  (which,  however, 
only  in  a  qualified  degree,  as  we  shall  see  presently, 
issues  from  the  Law  of  Equal  Freedom  as  formu- 
lated by  him)  is  justified  in  his  opinion  by  the  law, 
by  conformity  to  which,  he  says,  the  species  is 
preserved,  namely,  "  that  among  adults  the  indi- 
viduals best  adapted  to  the  conditions  of  their 
existence  shall  prosper  most,  and  that  individuals 
least  adapted  to  the  conditions  of  their  existence 
shall  prosper  least — a  law  which,  if  uninterfered 
with,  entails  survival  of  the  fittest,  and  spread  of 
the  most  adapted  varieties.  .  .  .  Ethically  con- 
sidered, this  law  implies  that  each  individual  ought 
to  receive  the  benefits  and  the  evils  of  his  own 
nature  and  consequent  conduct  ;  neither  being 
prevented  from  having  whatever  good  his  actions 
normally   bring   to   him,    nor   allowed   to   shoulder 

3i 


Economic  Moralism 

off  on  to  the  other  persons  whatever  ill  is  brought 
him  by  his  actions." 

Spencer  adduces  no  evidence  in  proof  of  his 
theory  that  this  law  of  inequality  as  expressed 
in  the  last  quotation  is  necessary  for  the  preserva- 
tion of  the  human  species.  Indeed',  his  practical 
disbelief  in  it  is  very  clearly  shown  in  the  develop- 
ment of  those  parts  of  his  ethical  theory  dealing 
with  "  Negative  Beneficence  "  and  "  Positive 
Beneficence."  As  we  shall  see,  he  justifies  actions 
that  run  counter  to  this  law,  which  if  it  be 
biologically  and  sociologically  true,  is  of  supreme 
importance,  and  to  be  disobeyed  only  at  the  cost 
of  the  annihilation  or  utter  degradation  of  the 
human  species.  Moreover  (if  we  come  down  to 
the  concrete),  low  wages,  if  approved  as  a  means 
of  weeding  out  the  unfit  by  death,  cannot  be 
allowed  to  be  efficacious.  The  result  is  certainly 
that  the  death-rate  is  high,  but  so,  as  a  rule, 
is  the  birth-rate,  and  there  is  then  a  survival  of 
those  fit  to  live  at  the  lower  standard.  In  other 
words,  such  a  system  tends  not  to  destroy,  as 
Spencer  might  be  accused  of  desiring,  but  to 
degrade  the  species  or  a  large  portion  of  it,  which 
from  his  point  of  view  must  be  worse.  Besides, 
its  advocates  erroneously  suppose  that  inefficient 
parents  necessarily  have  inefficient  children,  and 
they  do  their  best  to  crush  the  efficient  children 
of  inefficient  parents  as  well  as  the  prime  offenders. 
As  J.  Arthur  Thomson  in  "  Darwinism  and  Human 
Life  "  points  out  :  "It  has  often  been  remarked 
that  the  children  of  extraordinarily  gifted  parents 

32 


Ethical   First  Principles 

are  sometimes  very  ordinary  individuals,  and  that 
the  children  of  under-average  parents  sometimes 
turn  out  surprisingly  well,  both  physically  and 
mentally."  It  is  recognized  that  there  is  a  distinct 
tendency  to  the  race  average.  The  infinite  varia- 
bility of  human  heredity,  arising  probably  from 
the  long-continued  immunity  from  the  more 
extreme  eliminating  action  of  nature  to  which  life 
on  the  lower  stages  is  subjected,  completely  over- 
throws  Spencer's    theory. 

Let  us  now  see  how  he  disregards  this  theory, 
which  is  so  clearly  untenable.  He  says  there  are 
two  divisions  of  Altruism — Justice  and  Beneficence 
— the  one  needful  for  social  equilibrium,  and  there- 
fore of  public  concern,  and  the  other  not  needful 
and  therefore  only  of  private  concern.  He  main- 
tains that  the  requirements  of  equity  ought,  of 
the  individual's  free  will,  to  be  supplemented  by 
the  promptings  of  kindness.  As  we  shall  see, 
Spencer  advocates  very  considerable  interference 
with  the  law  of  equity  in  economic  matters  in  the 
name  of  "  Beneficence,"  but  he  holds  it  must  be 
done  voluntarily  by  the  individual  and  not  compul- 
sorily  by  the  State.  His  well-known  antipathy 
to  State  action  places  him  in  the  awkward  dilemma 
of  having  to  extend  the  functions  of  the  State 
or  to  sacrifice  the  logical  strength  of  his  ethical 
theory.  After  insisting  that  the  Law  of  Justice 
is  necessary  for  the  preservation  of  the  species, 
he  says  with  regard  to  Positive  Beneficence  : 
"  Beyond  the  equalization  which  Justice  imposes 
upon  us,  by  putting  to  the  liberties  of  each  limits 

33  c 


Economic  Moralism 

arising  from  the  liberties  of  all,  beneficence  exhorts 
us  to  take  steps  towards  a  furtlier  equalization. 
Like  spheres  of  action  having  been  established, 
it  requires  us  to  do  something  towards  diminishing 
the  inequalities  of  benefits  which  superior  and 
inferior  severally  obtain  within  their  spheres." 
Laudation  of  "  that  form  of  beneficence  which 
seeks  to  make  less  unequal  the  lives  of  those 
to  whom  Nature  has  given  unequal  advantages  " 
seems  out  of  place  after  his  formation  of  the  "  Law 
of  the  Preservation  of  the  Species,"  as  given  above. 
But  there  is  no  doubt  that  this  Law  of  Beneficence 
is  an  integral  part  of  his  ethical  system,  and  that 
his  advocacy  of  inequality  under  the  Law  of  Justice, 
with  which  it  clashes,  is  based  on  a  false  view  of 
human  evolution,  which  was  welcomed  by  Spencer 
as  a  justification  of  his  political  prejudices. 

The  question  of  the  limits  to  State  action  does 
not  need  to  be  considered  at  this  stage.  Acts  of 
beneficence,  whether  left  to  the  individual  or  the 
State,  are  right  or  wrong  as  judged  by  their 
consequences,  and  if  Spencer  justifies  them,  it  must 
be  on  the  ground  of  some  principle  which  he 
has  formulated,  or  which  exists  unformulated  in 
his  mind.  This  principle  we  must  discover,  and 
if  it  is  in  nebulous  state,  raise  it  "  from  the 
indefinite  to  the  definite,"  to  use  his  favourite 
phrase.  This  can  best  be  done  by  considering 
in  the  first  place  the  corollaries  which  Spencer 
considers  the  logical  deductions  from  his  Law  of 
Equal  Freedom,  and  later  on  by  taking  note  of 
the  extent  to  which  he  modifies  them  by  his  theory 

34 


Ethical  First  Principles 

of  Beneficence.  We  shall  consider  only  the  corol- 
laries that  are  distinctly  economic  ;  it  is  unneces- 
sary therefore  to  consider  such  corollaries  as  the 
Right  of  Physical  Integrity,  the  Right  to  Free 
Motion  and  Locomotion,  the  Rights  of  Free  Belief 
and  Worship,  Free  Speech,  and  Publication,  etc., 
etc.  Those  of  special  interest  from  the  economist's 
point  of  view  are  the  Rights  to  the  Uses  of  Natural 
Media,  the  Right  of  Property,  the  Rights  of  Gift 
and  Bequest,  the  Rights  of  Free  Exchange  and 
Free  Contract,  and  the  Right  of  Free  Industry. 
But  for  our  present  purpose  only  the  first  two 
need  close  examination. 

With  regard  to  the  Rights  to  the  Uses  of  Natural 
Media,  Spencer  very  truly  says  :  "A  man  may 
be  entirely  uninjured  in  body  by  the  actions  of 
fellow-men,  and  he  may  be  entirely  unimpeded  in 
his  movements  by  them,  and  he  may  yet  be  pre- 
vented from  carrying  on  the  activities  needful  for 
maintenance  of  life,  by  traversing  his  relations 
to  the  physical  environment  on  which  his  life 
depends."  The  natural  media  are  light,  air,  and 
also,  to  use  Spencer's  words,  "  the  surface  of  the 
earth  ...  by  an  unusual  extension  of  meaning." 
His  evident  reluctance  to  include  the  land  in  the 
list  of  natural  media  appears  more  clearly  in  his 
vigorous  but  futile  attempts  to  demonstrate  that 
there  should  be  no  practical  outcome  from  the 
proposition.  However,  he  cannot  but  admit  the 
deduction.  He  confesses  that  "  it  appears  to  be 
a  corollary  from  the  Law  of  Equal  Freedom,  inter- 
preted with  strictness,  that  the  earth's  surface  may 

35 


Economic  Moralism 

not  be  appropriated  absolutely  by  individuals,  but 
may  be  occupied  by  them  only  in  such  manner  as 
recognizes  ultimate  ownership  by  other  men — that 
is,  by  Society  at  large."  He  then  deals  with  the 
historical  aspect  and  demonstrates  that  "  before 
the  progress  of  social  organization  changed  the 
relations  of  individuals  to  the  soil,  that  relation 
was  one  of  joint  ownership,  and  not  one  of  indi- 
vidual ownership."  He  traces  the  overthrow  of 
that  relation  through  force  and  fraud,  and  the 
lapse  of  communal  rights  into  private  rights,  this 
private  ownership,  however,  being  subordinate  to 
the  overlord  to  the  extent  that  now,  as  Sir  Frederick 
Pollock  says,  "  No  absolute  ownership  of  land 
is  recognized  by  our  law  book  except  in  the 
Crown." 

The  point  of  importance  in  his  historical 
retrospect,  although  he  does  not  perceive  it,  is 
that  while  in  certain  periods  in  the  past  the  actual 
benefits  of  ownership  were  enjoyed  by  the  people, 
and  that  while  such  benefits  are  what  are  called 
for  by  the  corollary  in  all  ages,  the  people  now 
are  excluded  rigorously  from  all  these  benefits 
and  have  merely  a  nominal  overlordship  through 
the  State.  Spencer  commits  a  most  grave  error 
in  neglecting  to  show  how  in  our  days  this  most 
important  right  can  be  secured  to  the  individual. 
He  says,  perhaps  by  way  of  excuse  and  certainly 
without  proof,  that  "  the  badness  of  the  required 
system  of  administration  is  the  only  reason  urged 
for  maintaining  the  existing  system  of  land- 
holding."      It   is   foreign   to   our   purpose   to   deal 

36 


Ethical   First  Principles 

with   ^his  untenable   view  here.      Suffice  it   to   say 
that  he  thus  gives  up  all  attempts  to  put.  this  most 
important    corollary     into    practice.       He    argues 
further,  although  judging  from  the  last  quotation 
further  argument  is  unnecessary,  that  all  that  can 
be  claimed  for  the   community  is  the  land   in  its 
original  unsubdued  state,  and  that  full  compensa- 
tion for  the  rest  would  have  to  be  given.     The  most 
important  question  of  determining  the  compensation 
he  does  not  deal  with,  save  in  a  very  absurd  note 
in  which  he  argues  that  the  people  are  the  land- 
lords'   debtors.       But    it    must    be    incr  ired    into. 
Wherein    consists    the    inequity    of    private    land- 
ownership    in  the   present   day?      Apart   from  that 
portion   which    is    used   for    the    personal    pleasure 
of  the  landowners,  the  land  is  built  upon  or  culti- 
vated  and    the   mines   are   worked    by   the    people 
for   social    purposes.      But    the    whole    product    of 
the  labour  engaged  upon  the  land  is  not   secured 
to  the  producers.     A  large  portion  is  appropriated 
by  the   landowners   as   rent,   and  thus   the   present 
system    of    landholding    succeeds    in    doing    what 
Spencer    condemns    "  the    political    meddler  "    for 
trying  to  do,  namely,  divorces  conduct  from  conse- 
quence, and  traverses  the  principle  of  human  justice 
which  requires   that  each   shall  enjoy  the   benefits 
achieved  within  the  needful  limits  of  action.     Rent 
is   not    payment    for    labour.      It    is    paid   whether 
the  individual  landowner  is  an  idler  and  good-for- 
nothing,   a   babe-in-arms,   or   a   lunatic.      It   is   the 
net    amount    left    after    all    management    expenses 
have  been  paid.     Any  system  which  leads  to  this 

37 

208135 


Economic   Moralism 

runs  counter  to  the  first  principles  of  ethics  as 
expounded  by  Spencer  himself.  Against  it  can 
be  urged  with  justice  Spencer's  dictum  that  benefits 
irrespective  of  deserts  lead  to  a  State  with  the 
motto,  "It  shall  be  as  well  for  you  to  be 
inferior  as  superior."  Since  the  appropriation  of 
rent  is  immoral,  condemned  as  it  is  by  Spencer's 
first  principles,  the  question  of  compensation  is 
rendered  easy  to  answer.  The  landowners  have 
been  unjustly  exacting  rent  from  the  people  for 
time  out  of  mind,  and  therefore  in  strict  equity 
they  ought  to  be  made  to  compensate  rather 
than  to  be  compensated.  The  improvements  on 
the  land  have  been  made,  not  by  the  landowners, 
as  Spencer  pretends  in  the  note  just  referred  to, 
but  by  the  past. generations  of  workers.  Any  com- 
pensation to  landowners  would  be,  ex  gratia,  and 
according  to  the  principles  of  relative  ethics, 
applicable  to  the  transition  period.  Absolute  ethics 
condemns  any  payment  whatever  to  compensate 
the  landowner  for  the  deprivation  of  rent. 

This  brings  us  to  the  Right  of  Property. 
Spencer  argues  that  the  right  of  property  is  orig- 
inally deducible  from  the  Law  of  Equal  Freedom. 
It  is  also  a  deduction  from  the  Right  to  the  Use 
of  the  Earth,  and  therefore,  he  says,  complete 
ethical  justification  for  the  right  of  property  is 
involved  in  the  same  difficulties  as  the  ethical 
justification  for  the  right  to  the  use  of  the  earth. 

There  are  three  ways,  he  says,  in  which  men's 
several  rights  of  property  may  be  established  with 
due  regard  to  the  equal  rights  of  all  other  men  : — 

38 


Ethical  First  Principles 

1st.  Savage. — Equal  opportunities  for  utilizing 
wild    products. 

2nd.  Semi-civilized. — Recognition  of  produce  of 
land  as  the  property  of  the  producers 
with   the    land   periodically   divided. 

The  third  way,  namely,  that  which  should 
operate  in  the  civilized  State,  is  of  the  greatest 
importance  to  us.  But  Spencer  deals  with  it 
perfunctorily.  In  the  two  earlier  periods  we  find 
Society  making  an  attempt  with  some  success  to 
give  every  free  man  an  equal  opportunity  of  access 
to  the  means  of  production,  so  that  he  would  be 
economically  free.  We  find  any  such  attempt  in 
the  civilized  State  condemned  by  Spencer  as 
impracticable,  although  he  grudgingly  admits  it  to 
be  ethically  justifiable.  He  is  compelled  to  allow 
that  only  where  State  -ownership  is  not  potential 
but  actual  is  there  established  that  kind  of  use  of 
the  earth  which  gives  a  valid  basis  to  the  right 
of  private  property 

The  land  and  the  other  means  of  production 
necessary  to  a  civilized  State  are  permanently 
alienated  from  the  people.  Spencer  speaks  of  a 
potential  contract  between  the  individual  and 
Society.  Judging,  however,  from  his  proposals 
with  regard  to  the  recognition  of  the  ultimate 
ownership  of  land  by  Society  at  large,  this  potential 
contract  is  a  mere  academic  futility.  "  Though 
during  great  predominance  of  militant  activity  the 
ownership  of  land  by  the  community  lapsed  into 
ownership  by  chiefs  and  kings,  yet  now  with  the 
development    of    industrialism    the    truth    that    the 

39 


Economic   Moralism 

private  ownership  of  land  is  subject  to  the  supreme 
ownership  of  the  community,  and  that  therefore 
each  citizen  has  a  latent  claim  to  participate  in  the 
use  of  the  earth  has  come  to  be  recognized."  The 
"  latent  claim  "  bears  a  strong  family  likeness  to 
the  "  potential  contract." 

Spencer  on  this  question  falls  far  short  of  his 
promise.  He  goes  no  farther  than  merely  to 
demonstrate  that  the  individual  has  the  right  to 
hold  property.  He  does  not  indicate  what  can 
rightly  be  considered  the  property  of  any  indi- 
vidual. He  does  not  show  how  wealth  ought  to 
be  apportioned  according  to  ethical  principles.  He 
does  not  place  rent,  interest,  profit,  and  wages  on 
an  ethical  basis.  He  does  not  indicate  how  wages 
ought  to  be  determined.  Certainly,  he  says  that 
the  right  of  property  originated  in  the  recognition 
of  relation  between  effort  and  benefit.  Logically 
this  condemns  rent,  interest,  and  profit — in  fact, 
all  income  save  wages  or  salaries  for  work  done. 
But  how  this  is  to  be  secured  he  does  not  suggest. 
He  does  not  even  recognize  the  logical  necessity 
of  the  deduction.  Further  he  says  :  "  Each  indi- 
vidual ought  to  receive  the  benefits  and  the  evils 
of  his  own  nature  and  consequent  conduct,  neither 
being  prevented  from  having  whatever  good  his 
actions  normally  bring  to  him,  nor  allowed  to 
shoulder  off  on  other  persons  whatever  ill  is 
brought  on  him  by  his  actions."  He  refers  to 
the  general  consciousness  that  there  should  be  a 
proportion  between  effort  put  forth  and  advantage 
achieved,  and  holds  that  the  fundamental  principle 

40 


Ethical  First  Principles 

of  social  co-operation  is  that  each  individual  shall, 
under  ordinary  circumstances,  receive  neither  more 
nor  less  than  a  true  equivalent  for  his  services. 
Like  all  the  orthodox  writers  on  ethics,  Spencer 
neglects  to  deal  with  the  practical  side  of  the 
subject,  and  his  readers  are  left  to  themselves  to 
ascertain  the  "true  equivalent."  And  yet  this  is 
the  all-important  question—"  the  fundamental  prin- 
ciple of  social  co-operation."  It  is  recognized 
generally  that  the  present  social  system  does  not 
secure  this  for  the  individual.  As  John  Stuart 
Mill  writes:  "The  reward  [of  labour]  instead  of 
being  proportioned  to  the  labour  and  abstinence 
of  the  individual  is  in  an  inverse  ratio  to  it; 
those  who  receive  the  least,  labour  and  abstain 
the  most."  Spencer,  on  the  other  hand,  betrays 
an  amazing  disregard,  if  it  be  not  ignorance,  of 
the  economic  position  of  the  workers  in  his  own 
times.  After  enunciating  the  first  principles  of 
ethics,  he  by  some  extraordinary  perversion  arrives 
at  conclusions  with  which  he  defends  his  well- 
known  reactionary  views.  Although  he  maintains 
as  a  principle  that  all  men  have  equal  rights  to 
achieve  happiness,  and  although  equality  of  oppor- 
tunity is  a  necessary  condition,  he  regards  with 
great  satisfaction  the  differences  of  social  position 
in  the  present  economic  system,  which,  of  course, 
negative  such  opportunity.  So  unlike  Mill,  he 
says:  "It  is  manifest  that  both  the  greater 
longevity  among  individuals  and  the  great  differ- 
ences of  social  position  imply  that  in  civilized 
societies,  more  than  in  uncivilized  societies,  differ- 

4i 


Economic   Moralism 

ences  of  endowment  and  consequent  differences 
of  conduct  are  enabled  to  cause  their  appropriate 
differences  of  results,  good  or  evil :  the  justice 
is  greater."  But  does  difference  of  social  position 
arise  solely  from  difference  of  endowment  and 
effort?  Personal  endowment  giving  such  results 
may  be,  and  is  generally,  endowment  of  the  Dick 
Turpin  variety.  Business  craft  and  cunning, 
besides  the  private  ownership  of  the  "  natural 
media  "  and  of  the  instruments  of  production 
required  in  civilization,  may,  and  in  actual  fact 
do,  enable  individuals  to  "  shoulder  off  "  their  re- 
sponsibilities on  less  fortunate  but  more  industrious 
and  more  moral  individuals,  and  thus  ensure  that 
each  individual  shall  not  receive  the  "  true  equiva- 
lent "  for  his  services.  Spencer,  in  fact,  quite 
obviously  begs  the  question  here.  He  fails  to 
define  the  method  of  ascertaining  the  "  true 
equivalent."  He  speaks  of  ensuring  that  "  every 
one  may  obtain  and  enjoy  all  he  has  earned." 
But  how  can  we  ascertain  what  a  man's  earnings 
really  are?  Are  they  merely  all  he  receives  by 
any  legal  means?  Can  no  part  of  income  be 
unjustly  gotten?  Cannot  one  be  defrauded  by 
being  given  too  little  for  one's  labour?  Spencer 
does  not  help  us  to  discriminate.  However,  it  is 
clear  that  rent  and  interest — that  is,  "  unearned 
income  "  as  now  defined  for  fiscal  purposes  by 
Act  of  Parliament — are  ruled  out  of  ethically  justi- 
fiable income  by  the  first  principles  propounded 
by  Spencer,  all  the  work  done  in  return  for  that 
kind    of    income    being    merely,    as    Bismarck    ex- 

42 


Ethical   First  Principles 

pressed  it,  the  clipping  of  coupons  or  the  signing 
of  receipts.  Spencer's  inability  to  perceive  justice 
and  injustice  in  the  concrete  vitiates  his  theory 
of  political  rights,  which  with  its  championing  of 
the  "  rights  of  classes  "  and  its  condemnation  of 
equal  political  rights  for  individuals,  its  advocacy 
of  the  representation  of  interests  and  not  of  in- 
dividuals, is  so  undemocratic,  and  which  has 
encouraged  so  many  reactionary  journalists  to  echo 
his  untenable  dictum  that  the  "  class  legislation  " 
of  the  aristocracy  is  being  replaced  by  that  of  the 
working  class.  He  does  not  understand  that  the 
first  was  for  the  benefit  of  the  few,  mostly  idlers, 
in  privileged  position  and  to  the  disadvantage  of 
the  industrious  many,  while  the  second,  being  for 
the  workers,  means  justice  for  all,  and  must  neces- 
sarily be  detrimental  only  to  the  unjustifiable  privi- 
leges of  the  few.  Only  the  first  can  be  correctly 
described  as  class  legislation.  He  is,  of  course, 
quite  correct  in  saying  that  equal  political  rights 
will  not  as  a  matter  of  course  ensure  the  main- 
tenance of  equal  rights  properly  so  called.  That 
can  only  come  about  by  the  growth  of  the  true 
ethical  sentiment  and  idea. 

Spencer  stands  almost  alone  among  students  of 
social  questions  in  being  satisfied  with  things  as 
they  are,  in  the  economic  sphere,  and  with  com- 
petition as  the  supreme  ethical  regulator.  But 
there  seems  little  use  of  any  scheme  of  ethics  or 
any  personal  moral  effort,  if  competition  works 
for  justice.  He  says:  "Society  gives  to  the 
labourer   ...   as  much  as  competition  proves  his 

43 


Economic   Moralism 

work  to  be  worth."  Further:  "The  welfare  of 
any  living  body  depends  on  due  proportioning  of 
its  several  parts  to  their  several  duties ;  and  the 
needful  balance  of  power  among  the  parts  is 
effected  by  constant  competition  for  nutriment  and 
the  flowing  to  each  of  a  quantity  corresponding  to 
its  work.  That  competition  throughout  the  indus- 
trial parts  of  a  society  achieves  a  kindred  balance 
in  a  kindred  way  needs  no  proof."  It  is  always 
Spencer's  most  disputable  propositions  that  need 
no  proof. 

Spencer  fails,  then,  or  rather  neglects,  to 
demonstrate  that  the  present  economic  system  is 
based  on  the  Law  of  Equal  Freedom,  or  to  show 
what  form  an  economic  system  based  on  that 
law  would  take.  He  maintains  that  the  business 
of  the  social  aggregate,  or  incorporated  body  of 
citizens,  is  to  maintain  the  ultimate  law  of  species 
life  as  qualified  by  social  conditions — i.e.  indi- 
viduals must  not  so  interfere  with  one  another  as 
to  prevent  receipt  by  each  of  benefits  his  actions 
naturally  bring  to  him,  or  transfer  to  others  the 
evils.  We  accept  that  view  with  slight  qualifica- 
tion, but  contend  that  it  is  necessary  for  this  social 
aggregate — in  other  words,  the  State  or  "  incor- 
porated body  of  citizens  " — in  a  highly  developed 
and  differentiated  economic  system  such  as  is 
spread  all  the  world  over  in  the  present  day  to 
acquire  and  manage  as  public  property  the  land 
and  the  capital,  as  this  is  the  only  way  in  which 
individuals  can  be  deprived  of  the  power  to  inter- 
fere   with    one    another    in    the    above-described 

44 


Ethical   First  Principles 

manner.  Justice  in  the  economic  sphere  cannot 
be  secured  in  any  other  way  than  by  such  a  system. 
Spencer  denies  that  equity  permits  the  State  to 
help  or  direct  or  restrain  the  individual  by  inter- 
fering, as  he  says,  with  the  carrying  on  of  life 
itself,  instead  of  simply  maintaining  intact  the  con- 
ditions under  which  life  may  be  carried  on.  But 
these  conditions  cannot  be  maintained  except  by 
the  public  ownership  and  management  of  land  and 
industrial  capital.  And  this  does  not  interfere 
with  the  carrying  on  of  life.  He  says:  "  To  main- 
tain intact  the  conditions  under  which  life  may 
be  carried  on  is  a  business  fundamentally  distinct 
from  the  business  of  interfering  with  the  carrying 
on  of  life  itself,  either  by  helping  the  individual 
or  directing  him  or  restraining  him."  What  is 
really  meant  by  this?  What  is  "  the  carrying 
on  of  life,"  and  what  are  the  "  conditions  "  for 
carrying  it  on?  If  a  person  has  free  choice  of 
the  work  necessary  for  his  maintenance,  gets  the 
"  true  equivalent  "  of  his  labour,  is  free  to  decide 
how  much  is  necessary  for  that  maintenance  and 
to  do  the  necessary  work  for  it,  to  spend  his 
income  and  his  spare  time  as  he  pleases  so  long 
as  he  does  not  thereby  injure  his  fellows,  he  is 
free  to  "  carry  on  life  itself  "  without  disturb- 
ance by  the  State  or  aggregate  of  citizens.  This 
quite  evidently  can  only  be  secured  under  an 
economic  system  based  on  the  collective  owner- 
ship and  control  of  industrial  capital  and  land, 
with  the  collective  income  distributed  on  ethical 
principles.      To   emphasize   this:     "the   conditions 

45 


Economic   Moralism 

under  which  life  may  be  carried  on  "  cannot  be 
obtained  in  a  modern  civilized  State  with  its 
territory  densely  populated,  its  industry  highly 
specialized,  based  on  division  of  labour  and 
functions  and  on  co-operation  and  mutual  de- 
pendence of  parts,  unless  the  means  of  production 
are  public  property,  industrial  operations  are  co- 
ordinated under  public  control,  and  the  general 
product  of  labour  divided  among  the  producers 
on  recognized  equitable  principles.  Spencer  says 
that  in  one  or  both  of  two  ways  the  State  may 
unjustifiably  go  beyond  the  limits  of  its  only  duty, 
which  is  to  maintain  intact  the  equitable  conditions 
of  life.  First,  it  "  may  restrain  the  freedom  of 
some  individuals  more  than  is  required  by 
maintenance  of  the  like  freedom  of  other  indi- 
viduals." He  gives  no  modern  instance  of  this, 
but  mentions  the  tying  of  serfs  to  the  lands  on 
which  they  were  born.  The  only  perceptible  differ- 
ence between  that  and  the  second  way  is,  as  he 
explains,  that  in  the  latter  the  wrong  is  general 
and  indirect  and  in  the  former  special  and  direct. 
The  wrong  is  general  and  indirect  when,  in  the 
second  way,  "  money  taken  from  the  citizen,  not 
to  pay  the  costs  of  guarding  from  injury  his 
person,  property,  and  liberty,  but  to  pay  the  costs 
of  other  actions  to  which  he  has  given  no  assent, 
inflicts  injury  instead  of  preventing  it."  Again, 
"  taxpayers  are  subject  to  a  State  corvee,  which 
is  not  the  less  decided  because  instead  of  giving 
their  special  kinds  of  work  they  give  equivalent 
sums."     He  scoffs  at  the  reply  that  they  are  slaves 

46 


Ethical   First  Principles 

for  their  own  advantage,  and  that  the  things  done 
with  the  money  taken  from  them  in  one  way  or 
other  conduce  to  their  welfare.  He  holds  that 
a  man's  liberties  are  none  the  less  aggressed  upon 
because  those  who  coerce  him  do  so  in  the  belief 
that  he  will  be  benefited,  and  he  maintains  that 
by  imposing  by  force  their  wills  upon  his  will 
they  are  breaking  the  law  of  equal  freedom.  As 
an  argument  against  communistic  taxation  this  is 
admirable,  but  as  will  be  shown  in  the  chapters 
on  "  Renewal  and  Raising  of  Capital  "  and  "  Taxa- 
tion," the  ideal  economic  system  advocated  here 
in  no  way  transgresses  this  law,  whereas  under 
the  present  system  it  is  necessarily  transgressed, 
less  perhaps  by  the  State  in  the  form  of  taxation 
(although  that  form  of  it  is  increasing)  than  by 
the  landowners  and  capitalists  in  their  exaction 
of  tribute  in  the  form  of  rent,  interest,  and  profit. 
Under  the  present  system  the  State  does  not 
maintain  the  conditions  under  which  life  may  be 
carried  on  in  equity.  It  does  not  protect  the 
individual  against  "  internal  aggression."  This  can 
only  be  done  by  positive  State  action  in  economic 
arrangements — in  other  words,  by  the  organiza- 
tion of  industry  by  the  State.  Only  by  the  State — 
that  is,  the  organized  people — owning  and  working 
the  land  and  all  industries  can  the  individual  be 
assured  equal  opportunity  with  all  other  individuals 
to  acquire  property  and  to  achieve  the  happiness 
derivative  therefrom.  No  one  can  reasonably 
assert  that  it  is  sociologically  desirable  that  land 
and   capital   should   be   in   the  hands  of  a  limited 

47 


Economic   Moralism 

number  of  the  population,  for  such  a  system  results 
in  the  despoiling  of  those  without  land  and  capital 
of  a  great  portion  of  the  wealth  they  produce. 
This  exaction  of  rent  and  interest  renders  it  for 
ever  impossible  for  the  workers  as  a  class  to 
rise  out  of  their  position  of  virtual  bondage.  And 
there  is  no  ground  whatever  for  believing  that 
the  possessing  classes  would  ever  of  their  own 
accord  give  up  their  privileges.  Besides,  if  they 
were  to  do  so,  there  would  have  to  be  organized 
a  huge  voluntary  system  of  national  co-operation 
for  the  economical  and  equitable  production  and 
distribution  of  wealth,  and  this  would  in  no  wise 
differ  in  essence  from  the  compulsory  system  which 
will  have  to  be  introduced. 

Spencer  is  slave  to  the  erroneous  idea  that  the 
formula  of  justice  precludes  the  organization  of 
industry  by  the  State.  He  imagines  that  indi- 
viduals need  not,  and  may  not,  act  together  as 
"  the  social  aggregate  or  incorporated  body  of 
citizens  "  to  secure  for  each  by  State  industrial 
organization  the  true  equivalent  of  the  services 
each  has  rendered  to  society,  which  true  equiva- 
lent, by  the  way,  cannot  be  ascertained,  as  will 
become  apparent  later  in  our  argument,  except  in 
a  society  so  organized.  He  admits  that  one  of 
the  essential  functions  of  the  State  is  to  organize 
for  the  security  of  the  individual  against  internal 
aggression.  But  such  aggression,  in  his  opinion, 
is  evidently  that  of  direct  assault  on  person  or 
on  property  after  it  is  in  legal  possession.  The 
idea  of  the  function  of  the  State  just  enunciated 

48 


Ethical   First  Principles 

does  not  run  counter  to  Spencer's  theory  that 
"  specialization  with  consequent  limitation  normally 
takes  place  in  the  regulative  structure  of  a  society 
as  in  all  its  other  structures."  He  argues  that 
"  all-embracing  State  functions  characterize  a  low 
social  type ;  and  progress  to  a  higher  social 
type  is  marked  by  relinquishments  of  functions." 
Strangely  enough,  although  he  tacitly  admits  the 
necessity  of  "  a  regulative  structure  "  or  a  "  con- 
trolling part,"  he  advocates  the  relegation  of  this 
regulative  function,  which  peculiarly  appertains  to 
the  State  or  "  aggregate  of  citizens,"  to  private 
enterprise.  That  is  to  say,  he  would  sacrifice 
a  controlling  or  co-ordinating  social  function, 
instead  of  allowing  it  to  be  developed  from  the 
lower  to  the  higher  "  by  increasing  heterogeneity 
of  structure  and  increasing  subdivision  of 
functions."  In  other  words,  instead  of  allow- 
ing the  State,  or  aggregate  of  citizens,  to  develop 
and  expand  and  specialize,  he  would  leave  its 
necessary  regulative  functions  to  uncontrolled, 
irresponsible  persons — the  capitalist  captains  of 
industry. 

Spencer  does  not  make  open  admission  that 
injustice  arises  from  our  present  system  of 
property,  although  it  forces  those  without  land 
or  capital  to  compete  with  each  other  for  work 
from  the  landowners  and  capitalists.  On  the 
ground  that  slavery  is  inequitable,  he  would  prevent 
the  individual  from  selling  himself  into  slavery, 
but  he  overlooks  the  fact  that  the  landless  and 
capital-less    worker    sells    himself    piecemeal.      He 

49  D 


Economic  Moralism 

does  not  see  that  it  is  as  justifiable  to  prevent 
what  from  the  ethical  standpoint  is  technically 
robbery  of  labour,  by  taking  the  power  to  rob, 
the  power  to  give  less  than  a  "  true  equivalent," 
away  from  landowners  and  capitalists,  as  it  is  to 
suppress  highway  robbery.  He  says:  "While 
one  of  the  settled  conclusions  of  political  economy 
is  that  wages  and  prices  cannot  be  artificially 
regulated  with  advantage,  it  is  also  an  obvious 
inference  from  the  Law  of  Equal  Freedom  that 
regulation  of  them  is  not  morally  permissible." 
The  "  obvious  inference  "  is  Spencer's  usual  way 
of  begging  the  question.  As  regards  the  teaching 
of  political  economy,  it  is  perfectly  true  that  under 
the  present  system  the  regulation  of  wages  and 
prices  is  usually  ineffective  and  sometimes  injurious, 
and  it  is  so  of  necessity,  because  so  long  as  the 
land  and  the  means  of  production  are  held  in 
private  hands  the  landless  and  capital-less  are 
helpless,  and  if  not  deprived  of  their  just  remunera- 
tion in  one  way  they  are  in  another.  It  is  pre- 
cisely because  such  is  the  case  that  it  is  seen  to 
be  useless  to  attempt  to  secure  equitable  economic 
arrangements  under  the  existing  economic  system. 
The  little  that  can  be  done  now  can  only  be  to 
palliate,  when  possible,  the  evils  inherent  in  the 
system,  in   conformity  with  relative  ethics. 

We  have  now  considered  Spencer's  ultimate 
ethical  principle,  his  Law  of  Justice  unmodified  by 
the  supplementary  principle  of  Beneficence,  and 
have    found    that    logically    it    condemns    outright 

50 


Ethical   First  Principles 

the  appropriation  of  unearned  income,  such  as  rent 
and  interest,  and  consequently  the  economic 
arrangements  which  do  not  render  the  extraction 
of  these  forms  of  unearned  income  impossible  by 
securing  to  the  individual  full  freedom  for  his 
activities  within  the  limits  necessarily  defined  by 
the  similar  freedom  of  his  fellow-citizens.  It  must, 
however,  be  kept  in  mind  that  according  to  Spencer 
conduct  and  economic  arrangements  must  be 
governed,  not  by  the  Law  of  Justice  alone  but  by 
the  Law  of  Justice  modified  by  the  co-equal  prin- 
ciple of  Beneficence.  Since  in  the  economic 
sphere  justice  condemns  all  unearned  income,  such 
as  rent,  interest,  and  profit,  and  only  justifies  pay- 
ment for  labour,  justice  modified  by  beneficence 
provides  the  principle  according  to  which  the 
wealth  produced  should  be  divided  between  workers 
of  various  degrees  of  ability  and  those  incapaci- 
tated for  work.  As  Spencer  says,  justice^  implies 
a  sympathetic  recognition  of  others'  claims  to  free 
activity  and  the  products  of  free  activity,  while 
beneficence  implies  a  sympathetic  recognition  of 
others'  claims  to  receive  aid  in  the  obtainment 
of  these  products  and  in  the  more  effectual  carry- 
ing on  of  their  lives.  Again,  he  says,  the  highest 
form  of  life,  individual  and  social,  is  not  achievable 
under  a  reign  of  justice  only;  but  there  must  be 
joined  with  it  a  reign  of  beneficence;  the  re- 
quirements of  equity  must  be  supplemented  by  the 
promptings  of  kindness.  But  at  the  same  time 
he  declares  that  justice  is  needful  for  social  equi- 
librium, and  is  therefore  of  public  concern,  while 

5i 


Economic  Moralism 

beneficence  is  not  needful  for  social  equilibrium, 
and  is  therefore  only  of  private  concern.  He 
maintains  that  beneficence  exercised  by  society  in 
its  corporate  capacity  must  consist  in  taking 
away  from  some  persons  parts  of  the  products 
of  their  activities,  to  give  to  other  persons,  whose 
activities  have  not  brought  them  a  sufficiency.  If 
it  does  this  "  by  force,"  it  interferes  with  the 
normal  relation  between  conduct  and  consequence, 
and  justice  is  infringed  upon.  But  surely  this 
normal  relation  is  interfered  with,  even  when  the 
beneficent  actions  are  done  voluntarily  by  indi- 
vidual citizens,  and  if  condemnable  in  the  one 
case  such  interference  is  condemnable  in  the  other. 
The  result  on  the  inferior  is  the  same  in  both 
cases  in  the  sense  that,  according  to  Spencer's 
own  theory,  the  inferior  will  be  encouraged  in  his 
inferiority.  He  admits  that  it  seems,  from  one 
point  of  view,  unjust  that  the  inferior  should  be 
left  to  suffer  the  evils  of  their  inferiority,  for 
which  they  are  not  responsible.  He  is  humane 
enough  to  wish  to  relieve  them,  and  tries  to  avoid 
the  supposed  deteriorative  consequences  by  leaving 
such  relief  to  the  humane  feelings  of  private  indi- 
viduals. Presumably  his  idea  is  that  the  so-called 
superior,  or  rather  the  extremely  egoistic  among 
the  superior,  would  be  discouraged  in  their  efforts 
to  maintain  their  superiority  if  taxed  by  the  State 
for  beneficent  purposes.  He  does  not,  however, 
say  this.  He  merely  asserts  as  the  reason  for  his 
preference  for  private  rather  than  State  beneficence 
that    "  the   primary   law   of   harmonious   co-opera- 

52 


Ethical  First  Principles 

tion  may  not  be  broken  for  the  purpose  of  fulfilling 
the  secondary  law;  since,  if  it  is  so  broken  to 
any  great  extent,  profound  mischiefs  result."  As 
we  have  seen,  this  must  condemn  private  benefi- 
cence also. 

Spencer  does  not  make  it  clear  in  his  section 
on  Beneficence  how  far  he  is  dealing  with  relative 
and  how  far  with  absolute  ethics — a  fatal  mistake. 
Evidently  he  has  relative  ethics  in  view  for  the 
most  part,  judging  from  his  reply  to  a  protest  he 
supposes  made  against  his  conception  of  benefi- 
cence. Both  the  protest  and  the  reply  repay 
perusal.  The  protest  runs:  "Your  conception 
of  beneficence  is  a  radically  unbeneficent  one. 
Your  remarks  about  restraints  on  free  competition, 
and  on  free  contract,  imply  the  belief  that  all 
men  are  hereafter,  as  now,  to  fight  for  individual 
gain.  Services  rendered  by  the  well-off  to  the 
ill-off  are  taken  for  granted  in  your  remarks  about 
restraints  on  blame.  The  various  modes  of 
administering  charity,  condemned  or  approved  by 
you,  assume  that  in  the  future  there  must  be  rich 
and  poor  as  at  present.  And  some  of  the 
immediately  foregoing  exhortations  concerning 
behaviour  presuppose  the  continued  existence 
of  superior  and  inferior  classes.  But  those  who 
have  emancipated  themselves  from  beliefs  imposed 
by  the  past  see  that  all  such  relations  of  men  to 
one  another  are  bad  and  must  be  changed.  A 
true  ethics— a  true  beneficence— cannot  recognize 
any  such  inequalities  as  those  you  take  for  granted. 
If  ethical  injunctions  are  to  be  carried  out,  then 

53 


Economic   Moralism 

all  social  arrangements  of  the  kinds  we  now  know 
must  be  abolished,  and  replaced  by  social  arrange- 
ments in  which  there  are  neither  caste  differences 
nor  differences  of  means.  And  under  the  implied 
system  large  parts  of  the  actions  you  have  classed 
as  beneficent  will  have  no  place.  They  will  be 
excluded  as  needless  or  impossible."  And  the 
reply:  "Unquestionably  there  is  an  a  priori 
warrant  for  this  protest.  A  society  in  which  there 
are  marked  class  distinctions  cannot  fulfil  the  con- 
ditions under  which  the  fullest  happiness  can  be 
achieved.  Though  it  is  not  within  the  range  of 
possibility  that  all  the  units  shall  be  equal  in 
respect  of  their  endowments  (a  dreadful  state, 
could  it  be  reached),  yet  it  is  possible  that  there 
may  be  reached  such  kind  of  equality  as  results 
from  an  approximately  even  distribution  of  different 
kinds  of  powers — those  who  are  inferior  in  some 
respects  being  superior  in  others,  so  producing 
infinite  variety  with  a  general  uniformity,  and  so 
excluding  gradations  of  social  position.  Some  such 
type  of  human  nature,  and  consequent  social  type, 
are  contemplated  by  absolute  ethics.  But  it  is 
forgotten  that  during  the  stages  through  which 
men  and  society  are  slowly  passing  we  are  chiefly 
concerned  with  relative  ethics  and  not  with  absolute 
ethics." 

This  type  of  society  is  exactly  the  one  we  have 
in  view.  And  as  regards  the  type  of  human  nature, 
"such  kind  of  equality"  exists  now;  a  miner, 
sailor,  or  engineer  may  have  powers  lacking  in 
a    statesman,    scientist,    or    organizer    of    industry, 

54 


Ethical   First  Principles 

and  vice  versa.  All  kinds  of  powers  are  required 
by  society,  and  every  person  would  be  glad  to 
have  the  opportunity  of  exercising  his  powers,  of 
doing  the  work  he  is  fitted  for,  and  therefore  likes. 
All  socially  useful  work  is  necessary  and  equally 
honourable,  and  ought  to  return  to  the  workers 
remuneration  in  proportion  to  the  effort  expended, 
and  not  in  proportion  to  an  arbitrary  valuation  of 
the  kind  of  work.  We  find  little  assistance  in 
Spencer's  exposition  of  his  theory  of  Beneficence. 
It  can  hardly  be  said  that  he  gives  ethical  guidance, 
as  indeed  little  can  be  given  to  apply  in  a  funda- 
mentally immoral  system.  He  leaves  it  to  individual 
caprice.  He  says  that  to  what  extent  advantages 
over  others  may  be  pushed,  individual  judgments, 
duly  influenced  by  sympathy,  must  decide.  The 
most  important  admission  he  makes  is  one  which 
may  serve  as  an  abstract  principle:  "As  admitted 
on  a  previous  occasion,  that  harsh  discipline  of 
Nature  which  favours  the  well-endowed  and  leaves 
the  ill-endowed  to  suffer,  has,  from  the  human 
point  of  view,  an  aspect  of  injustice :  and  though, 
as  we  have  seen,  it  is  not  permissible  so  to  traverse 
the  normal  relation  between  conduct  and  conse- 
quences as  to  equalize  the  fates  of  the  well- 
endowed  and  the  ill-endowed,  it  is  permissible  to 
modify  its  results  where  this  may  be  done  without 
appreciable  interfering  with  the  further  progress 
of  evolution."  For  practical  use  this  formula 
requires  expansion  and  elaboration,  but  it  gives 
direction  to  ethical  effort. 

What  seems  to  be  Spencer's  fundamental  error 

55 


Economic  Moralism 

is  his  theory  that  human  nature  requires  to  undergo 
so  great  a  change  that  it  cannot  be  effected  "  for 
eras";  the  egoistic  nature,  he  says,  will  have  to 
be  transformed  into  an  altruistic  one,  and  nothing 
but  a  prolonged  discipline  of  social  life  can  effect 
the  change.  This  long  process  he  considers  neces- 
sarily a  process  of  continued  suffering  which 
cannot  be  escaped.  "  Meanwhile  the  chief  tem- 
porary function  of  beneficence,"  he  says,  "is  to 
mitigate  the  sufferings  accompanying  the  transi- 
tion; or  rather,  let  us  say,  to  ward  off  the  super- 
fluous sufferings.  The  miseries  of  readaptation 
are  necessary;  but  there  are  accompanying  un- 
necessary miseries  which  may  with  universal 
advantage  be  excluded." 

This  rather  gloomy  view  of  social  evolution  and 
of  the  adaptability  of  the  human  organism  to  new 
social  conditions  is  not  supported  by  the  results 
of  the  recent  studies  of  biologists,  and  especially 
of  their  investigations  with  regard  to  heredity  and 
social  inheritance.  J.  Arthur  Thomson,  in  his 
"  Darwinism  and  Human  Life,"  says:  "  It  behoves 
man  to  secure  that  the  literal  struggle  for  exist- 
ence is  replaced  by  an  endeavour  after  well-being, 
which  will  continue  in  a  subtler,  more  rational, 
more  humane,  form  the  automatic  singling  and 
sifting  which  goes  on  in  Nature."  The  same 
writer  says  again:  "Of  particular  importance  is 
the  fact  that  man,  in  contrast  to  other  creatures, 
has  developed  around  him  an  external  heritage,  a 
social  framework  of  customs  and  traditions,  of  laws 
and   institutions,    of   literature   and   art,    by   which 

56 


Ethical   First  Principles 

results  almost  equivalent  to  the  organic  transmis- 
sion of  certain  kinds  of  modifications  may  be 
brought  about."  And  Lloyd  Morgan  says,  in  his 
"  Darwinism  and  Modern  Science  ":  "  The  history 
of  human  progress  has  been  mainly  the  history  of 
man's  higher  educability,  the  products  of  which  he 
has  projected  on  to  his  environment.  This  educa- 
bility remains,  on  the  average,  what  it  was  a  dozen 
generations  ago;  but  the  thought-woven  tapestry 
of  his  surroundings  is  refashioned  and  improved 
by  each  succeeding  generation." 

The  human  race  is  at  bottom  gregarious,  and 
its  social  virtues  evolved  through  the  ages  are 
sufficiently  developed  to  secure  general  happiness, 
if  given  a  suitable  environment.  It  is  not  human 
nature  that  requires  to  be  changed,  but  modern 
civilization,  which  is  based  on  the  monopoly  of 
the  means  of  existence  and  a  consequent  struggle 
for  life,  the  people  being  shut  out  from  the  means 
of  life  in  a  way  unequalled  in  history.  Spencer 
himself  has  practically  to  condemn  what  is  the 
essential  characteristic  of  modern  civilization— 
namely,  competition— which  elsewhere  he  considers 
secures  justice.  He  says:  "The  battle  of  life 
as  carried  on  by  competition,  even  within  the 
bounds  set  by  law,  may  have  a  mercilessness  akin 
to  the  battle  of  life  as  carried  on  by  violence." 
And  he  proposes,  instead  of  co-operation  and  joint- 
ownership  of  the  means  of  production,  a  change 
of  human  nature  impossible  in  the  circumstances, 
as  he  himself  proves  in  his  article  on  "  Morals  of 
Trade."     He  says:    "  Each  citizen,  while  in  respect 

57 


Economic  Moralism 

of  his  competition  not  to  be  restrained  externally, 
ought  to  be  restrained  internally."  This  is  his 
Beneficence  theory,  into  the  details  of  which  as 
applied  to  Relative  Ethics  it  is  unnecessary  to 
follow  him.  Suffice  it  to  say  that  he  not  only 
displays  lamentable  ignorance  of  economic  law, 
but  a  gross  and  unaccountable  bias  in  favour  of 
capitalists  and  against  the  working  classes.  In 
every  case  Spencer  somehow  manages  to  make 
negative  beneficence  work  out  in  favour  of 
employers  in  danger  of  being  worsted,  but  never 
for  workers  in  a  similar  position.  He  aims  at 
the  impossible — namely,  the  moralizing  of  the  land- 
lord and  the  capitalist  in  the  economic  sphere. 
For  instance,  he  condemns  rack-renting.  He  says : 
"  Insistence  on  ruinously  hard  terms  cannot  be 
classed  under  the  head  of  injustice;  but  we  are 
led  to  recognize  the  truth  that  in  such  cases  the 
injunctions  of  negative  beneficence  are  scarcely  less 
stern  than  those  which  justice  utters."  Yet  he 
would  not  have  Society  interfere.  The  victim  of 
injustice  must  suffer  until  the  rack-renter,  "  duly 
swayed  by  the  sentiment  of  negative  benefi- 
cence/' will  refrain  from  taking  advantage  of  his 
position  ! 

To  sum  up.  Accepting  Spencer's  first  prin- 
ciples of  ethics  as  having  a  thoroughly  scientific 
basis,  we  have  deduced  from  these  the  condemna- 
tion of  all  unearned  income,  whether  rent,  interest, 
or  profit,  drawn  by  able-bodied  adults,  and  the 
justification  of  the  division  of  the  proceeds  of  co- 
operative   labour    in    proportion    to    effort,    except 

58 


Ethical   First  Principles 

when  such  reward  in  the  case  of  inadequate  service 
or  value  would  encourage  inefficiency. 

In  future  chapters  these  points  will  be  elabo- 
rated and  appeal  to  these  first  principles  made. 
But  first  let  us  consider  at  some  length  the  excuses 
advanced  in  defence  of  unearned  income,  and 
especially  the  light  thrown  upon  the  subject  by 
Christian  ethics,  the  ethics  professedly  accepted  in 
Western  civilization. 


59 


CHAPTER    II 

RENT,    INTEREST,   AND   PROFIT   ETHICALLY 
CONSIDERED 

All  social  reformers,  and  even  Socialists,  refrain 
from  a  direct  attack  on  the  rent,  interest,  and 
profit  of  Capitalism.  In  their  opinion,  and  in 
that  of  most  people,  such  a  proceeding  suggests 
mediaeval  tactics,  quite  out  of  date  and  ineffective. 
They  prefer  to  attack  specific  social  or  economic 
evils,  and  if  rent,  interest,  and  profit  stand  in 
the  way  of  reform,  then  so  much  the  worse  for 
rent,  interest,  and  profit.  Effective  as  these  tactics 
are  in  dealing  with  a  "  practical  "  people  like 
the  British,  who  have  no  great  fondness  for  general 
principles  and  logical  procedure,  they  fail  to  break 
down  the  opposition  to  any  reforms  except  those 
dealing  with  the  most  clamant  evils.  If  humane 
treatment  for  the  workers  were  secured — that  is, 
reasonable  hours,  plenty  of  work,  and  what  is 
considered  now  a  good  wage,  with  insurance  against 
invalidity  and  old  age,  all  of  which  might  really 
be  got  without  costing  the  capitalist  a  penny — 
the  equality  longed  for  by  men  like  William 
Morris    would    still    be    to    seek.      Not    till    rent, 

60 


Rent,   Interest,  and  Profit 

interest,  and  profit— a  trinity  of  evil— are  destroyed 
root  and  branch,  will  justice,  liberty,  and  brother- 
hood be  realized.  A  very  large  number  of  people 
will  resist  any  attack  on  Capitalism  to  the  bitter 
end,  because  they  believe  that  rent,  interest,  and 
profit  are  in  equity  due  to  the  owners  of  land  and 
capital.  In  their  eyes  this  is  in  the  nature  of  things. 
Evil  may  be  bound  up  with  it,  but  that  is  also 
in  the  nature  of  things,  and  it  must  be  left  to  the 
receiver  of  rent,  interest,  and  profit  to  ameliorate 
as  a  philanthropist  the  sufferings  that  he  as  a 
capitalist  really  causes  those  who  provide  him  with 
his  income.  The  feeling  that  rent,  interest,  and 
profit  are  ethically  justifiable  lies  at  the  root  of 
the  accusation  constantly  hurled  at  those  who 
denounce  Capitalism,  that  they  disregard  the 
eighth  commandment  and  advocate  spoliation. 
For  these  reasons  Economic  Moralism  calls  for  a 
frontal   attack   on   the   capitalist   position. 

The  old  term  "  usury  "  up  to  comparatively 
modern  times  covered  every  kind  of  payment  for 
the  use  of  anything  lent.  Usury  in  reality  in- 
cludes not  only  interest  in  the  narrow  economic 
sense,  but  profit,  both  being  ultimately  payment 
by  the  workers  for  the  use  of  capital;  and  it  also 
includes  rent,  which  is  payment  for  the  use  of  land. 
Ethically  considered,  these  three  forms  of  payment 
are  inseparable,  and  stand  or  fall  together. 

The  political  economist  makes  four  technical 
divisions  of  the  collective  income  of  any  civilized 
community,  namely,  rent,  interest,  profit,  and 
wages.     For  economic  investigation  it  is  convenient 

61 


Economic  Moralism 

to  make  these  divisions.  But  from  the  point  of 
view  of  ethics,  of  morality,  of  right  and  wrong, 
collective  income,  in  the  present  economic  system, 
is  in  the  last  analysis  divisible  into  only  two 
portions,  namely,  Wages,  or  that  which  goes  to 
the  producers  of  the  whole  of  that  income,  and 
Rent,  Interest,  and  Profit,  or  that  which  goes  to 
those  who  do  not  work  for  what  they  receive 
in   that   shape   or   form. 

Our  present  purpose  is  to  examine  the  arguments 
in  favour  of  rent,  interest,  and  profit,  and  to  prove 
that  such  forms  of  income  have  no  ethical  justifi- 
cation at  all — that  is  to  say,  that  being  Usury,  or 
payment  made  by  the  workers,  the  producers  of 
all  wealth,  for  the  use  of  land  and  capital,  they 
are  inherently  wrong. 

But  first  we  must  define  rent,  interest,  and 
profit  sufficiently  for  our  purpose.  Broadly  con- 
sidered, as  already  indicated,  they  are  what  is 
left  of  the  collective  income  after  deduction  of 
wages.  Wages  is  remuneration  for  work  actually 
done.  The  wages  received  by  any  individual 
worker  may  be  comparatively  too  high  or  too  low. 
We  have  nothing  to  do  with  that  at  present.  We 
are  concerned  with  the  other  portion  of  the  collec- 
tive income,  that  which  goes  to  certain  individuals, 
not  because  they  have  worked  for  it,  but  for  other 
reasons,    which    we    are    about    to    consider. 

The  necessity  for  definition  lies  principally  in 
connection  with  the  term  "  profit."  The  small 
shopkeeper,  or  indeed  any  person  carrying  on 
business  on  his  own  account  in  a  small  way,  is  in 

62 


Rent,   Interest,  and  Profit 

the  habit  of  calling  his  net  drawings  profit.  But  in 
too  many  cases  this  profit  merely  provides  him  with 
wages,  perhaps  insufficient  wages,  and  ought, 
therefore,  to  be  included  under  the  term  "  wages." 
Profit  is  rather  this  :  In  the  case  of  a  person 
carrying  on  business  with  borrowed  capital,  it  is 
what  is  left  over  after  he  has  paid  interest  on  the 
borrowed  money,  all  the  working  expenses,  and 
wages  to  all  those  employed  in  the  business, 
himself  included. 

Interest,  on  the  other  hand,  is  payment  for  the 
borrowed  capital.  It  follows  that  if  a  person 
carries  on  business  entirely  with  his  own  capital, 
he  pockets  both  interest  and  profit  ;  if  he  owns 
the  land  in  addition,  he  pockets  rent  besides  ;  and 
if  he  manages  the  business,  he  receives  wages  into 
the  bargain. 

Rent  is  payment  for  the  use  of  the  land,  and 
includes  agricultural  rents,  feu-duties,  royalties,  and 
wayleaves,  etc.  In  loose  everyday  language  rent 
frequently  and  erroneously  includes  interest  on 
capita]  used  in  rendering  the  land  more  productive 
and  useful,  and  also  what  is  really  interest  and 
profit  on  money  invested  in  house  property. 

Rent,  interest,  and  profit,  then,  are  simply 
different  forms  of  usury.  They  are  payments  for 
the  use  of  land  and  capital.  The  usurers,  those 
who  receive  this  as  unearned  income,  are  the  legal 
owners  of  land  and  capital.  Their  victims,  those 
who  provide  them  with  their  income,  are  all  those 
who  do  not  possess  any  land  or  capital,  or  a 
sufficient   portion   to   provide   them  with   their  fair 

t>3 


Economic  Moralism 

share  of  the  collective  income.  This  is  not  the 
view  that  has  always  been  taken  by  those  who  have 
denounced  usury.  Ruskin's  friend,  W.  C.  Sillar, 
for  instance,  took'  the  view  sometimes  held  during 
the  later  and  corrupt  period  of  the  Middle  Ages, 
that  in  industrial  and  commercial  undertakings 
the  only  possible  victim  of  usury  is  the  merchant 
or  manufacturer  who  carries  on  business  with 
borrowed  money,  and  that  when  that  individual 
carries  it  on  entirely  with  his  own  capital,  there 
is  no  usury  in  the  case.  But  clearly  there  is  usury 
in  both  cases,  and  the  victims  of  usury  are  the 
wage-workers.  For  these  people  do  not  possess 
any  land  or  capital,  and  yet  must  have  the  use  of 
them,  in  order  to  obtain  the  necessaries  of  life. 
Such  people,  however,  cannot  go  to  a  capitalist 
for  a  loan,  as  one  capitalist  goes  to  another.  And 
yet  they  must  have  a  loan  of  land  and  capital. 
Economic  arrangements  are  such  that  they  can 
attain  their  object  only  in  this  way  :  If  they  can 
sell  their  labour  to  a  capitalist,  they  get  access 
to  or  the  use  of  land  and  capital,  of  course  under 
the  direction  of  the  capitalist  or  his  manager,  and 
so  obtain  the  necessaries  of  life.  But  there  is  usury 
here  at  bottom  ;  for  these  people  who  produce 
all  the  wealth  have  to  give  up  a  part,  the  greater 
part,  of  the  product  of  their  labour  to  the  owners 
of  the  land  and  capital  for  the  use  of  these 
necessary   means   of    production. 

What,  then,  is  the  justification  of  usury?  This 
is  a  question  always  carefully  avoided  by  the 
upholders  of  things  as  they  are.     On  what  ethical 

64 


Rent,   Interest,  and  Profit 

grounds  do  the  Haves  exact  usury  from  the  Have- 
nots?  Anti-usury  arguments  are  supposed  to  be 
ethically  demolished  when  it  is  pointed  out  that 
capital  as  well  as  labour  is  concerned  in  the  pro- 
duction of  wealth,  and  therefore  ought  to  receive 
a  portion  of  it.  Nobody  disputes  that  capital 
is  necessary.  Land  and  capital  are  the  indis- 
pensable means  of  production — and  it  is  for  this 
very  reason  that  they  must  be  made  common 
property.  The  question  is  this  :  All  wealth  is 
produced  by  the  workers,  manual  and  mental,  and 
the  workers  alone  ;  it  is  certainly  not  produced 
by  the  non-workers  ;  why,  then,  should  the  workers 
share  the  product  of  their  labour  with  the  non- 
workers? 

Every  one  who  has  gone  some  depth  into  this 
subject  cannot  but  be  struck  with  the  total  absence 
in  modern  times  of  any  consideration  of  this  most 
important  ethical  question  by  those  who  pose  as 
the  teachers  of  morality,  the  ministers  of  religion. 
And  by  consideration  is  meant  intelligent  con- 
sideration, not  mere  unreasoning,  conservative 
insistence  on  things  as  they  are.  Their  exposition 
of  the  eighth  commandment  is  of  the  crudest  and 
shallowest  kind.  They  denounce  the  robbery  of 
the  rich  by  the  poor,  but  not  the  robbery  of  the 
poor  by  the  rich.  John  Rusk'in  was  emphatic, 
but  strictly  correct,  when  he  told  the  Bishop  of 
Manchester  that  he  and  his  fellow-clerics  had 
definitely  taught  through  all  their  public  life  the 
"  great  Devil's  Law  "  of  the  robbery  by  the  rich 
of  the   poor  in   the   two   terrific  forms,   either  of 

65  B 


Economic  Moralism 

buying  men's  tools  and  making  them  pay  for  the 
loan  of  them — Interest,  or  of  buying  men's  lands 
and  making  them  pay  for  the  produce  of  them — 
Rent.  It  is  the  abstinence,  as  Ruskin  adds,  from 
these  two  forms  of  theft,  which  St.  Paul  first 
requires  from  every  Christian,  in  saying,  "  Let 
him  that  stole,  steal  no  more."  Our  clerics,  then, 
unlike  their  early  predecessors,  refuse  to  deal, 
except  perfunctorily  and  dogmatically,  with  these 
extremely  important  ethical  questions  :  What  is 
a  just  price?  What  is  a  fair  wage?  Is  usury 
justifiable?  Evidently  considering  that  serious 
inquiry  into  these  ethico-economic  questions  (if 
they  are  not  settled  for  all  time)  lies  outside  of 
their  sphere,  they  refer  all  such  mundane  matters 
to  the  political  economists,  whose  function  they 
entirely  misunderstand.  Similarly  with  the  profes- 
sional writers  on  ethics  proper.  With  remarkable 
unanimity  they  confine  their  attention  to  the  purely 
psychological  and  philosophical  side  of  ethics. 
Practical  questions  of  right  and  wrong  they  do 
not  deal  with.  They  shirk  or  overlook  what  seems 
to  be  the  most  important  part  of  their  duty.  They 
too  refer  the  matter  to  the  political  economists. 
The  jurists  do  the  same.  What,  then,  do  the 
political   economists   say? 

Whoever  has  struggled  with  this  question  and 
referred  to  the  writings  of  Adam  Smith,  John 
Stuart  Mill,  and  other  economists  will  have  been 
struck  with  the  fact  that  they  never  even  attempt 
to  justify  usury.  One  and  all  seem  to  think  that 
the    mere    statement    of    the    matter    of    fact    is 

66 


Rent,  Interest,  and  Profit 

sufficient.  They  deal  with  the  fact  of  the  existence 
of  rent,  interest,  and  profit,  and  attempt  to  discover 
the  "  laws  "  according  to  which  the  relative 
amounts  are  regulated.  They  provide  no  argu- 
ment in  defence  of  the  morality  of  usury.  The  fact 
is,  the  economists  leave  the  ethical  side  of  the 
economic  question  to  the  moralists,  who,  as  has 
already  been  said,  shamefully  neglect  their  obvious 
duty,  and  any  change  in  the  present  economic 
system  is  left  to  the  practical  politicians,  of  whom 
it  must  be  admitted  only  the  Socialists  attempt 
to  deal  with  these  all-important  questions  seriously 
and  practically. 

Let  us,  then,  drag  out  such  arguments  in  favour 
of  usury  as  we  can  find,  and  submit  them  to 
analysis.  That  usury  is  in  part  merely  a  premium 
for  insurance  against  risk  is  an  argument  hardly 
worth  considering.  Any  payment  for  risk!  cannot, 
since  it  is  merely  an  insurance  premium,  be  more 
than  sufficient  to  cover  losses — that  is,  to  keep 
the  capital  intact.  Considering  the  matter  broadly, 
considering  the  capitalist  classes  as  a  whole 
lending  to  the  non-capitalist  classes  as  a  whole, 
we  can  see  that  if  no  loss  be  incurred,  no  payment 
should  be  made,  and  that  if  loss  be  incurred, 
the  payment  ought  to  be  merely  sufficient  to  cover 
that  loss.  Again,  considering  the  case  of  indi- 
vidual lending  to  individual,  it  is  difficult  to  see 
how  in  the  case  of  a  risky  adventure  the  mere 
promise  to  pay  a  high  interest  can  make  the  venture 
a  safe  one,  or  indeed  afford  any  protection  at 
all.     The  high  interest  is  of  course  only  of  value 

67 


Economic   Moralism 

if  the  lender  has  a  sufficient  number  of  invest- 
ments to  ensure  his  gains  on  some  equalling  his 
losses  on  others.  But  any  actual  increase  must 
be  accounted  for  on  other  grounds. 

That  usury  is  the  reward  of  abstinence  is  the 
argument  on  which  the  capitalists  seem  to  have 
staked  their  all.  And  yet,  as  Sidgwick  main- 
tains, Senior  and  his  followers,  who  first  used 
the  phrase  "  Reward  of  Abstinence,"  did  not  use 
is  as  signifying  any  ethical  sanction  to  the  reward 
at  all.  However,  if  usury  be  the  reward  of 
abstinence,  the  reward  surely  goes  to  the  wrong 
people.  It  is  not  the  millionaire  who  suffers  from 
abstinence,  but  the  ironworkers  who  produce  his 
dividends.  It  is  not  the  landowner,  but  the  slum- 
dwellers  who  pay  his  rents.  The  abstinence  argu- 
ment involves  the  paradox  that  the  capitalist  can 
both  eat  his  cake  and  keep  it.  He  can  abstain 
from  consuming  his  capital,  and  yet  derive  as  much 
enjoyment  as  if  he  did  not  abstain.  Consider 
the  following  supposititious  case.  Two  brothers 
are  left  a  fortune  of  £50,000  each.  One  of  them, 
an  admirer  of  John  Ruskin,  and,  like  his  master, 
holding  peculiar  ideas  about  usury,  refuses  to  take 
a  penny  of  rent,  interest,  or  profit,  and  decides 
to  consume  his  capital.  x\s  a  sensible  man  he 
does  not  wish  to  use  up  the  money  all  at  once, 
but  to  use  it  up  gradually  during  his  lifetime. 
He  therefore  arranges  with  the  workers  who  are 
employed  with  his  capital  to  pay  him  £1,000 
a  year,  and  consider  it  as  payment  of  the  principal. 
His  brother,  on  the  other  hand,  decides  to  abstain 

68 


Rent,   Interest,  and  Profit 

from  consuming  his  capital  and  makes  his 
workers  pay  him  interest  on  it  amounting  to 
4  per  cent,  per  annum.  He  therefore  pockets 
£2,000  a  year  as  the  reward  of  his  abstinence. 
At  the  end  of  fifty  years,  when  his  brother  has 
consumed  the  whole  of  the  £50,000  and  that  alone, 
capital  of  that  value  being  now  held  by  the 
workers,  the  usurer  has  received  in  all  as  interest 
£100,000,  and  still  possesses  the  original  sum  of 
£50,000,  his  workers  being  as  poor  as  ever. 
Wherein  consists  the  abstinence  of  the  latter,  and 
why  should  he  be  accounted  a  benefactor  to  society 
rather  than  his  brother? 

The  latter  is  typical  of  his  class.  Capital  is 
there  ;  it  exists,  brought  into  being  by  labour,  and 
continually  renewed  by  labour  for  its  legal  posses- 
sors, who  enjoy  rent,  interest,  and  profit  on  it, 
also  produced  by  labour.  There  is  no  abstinence 
on  the  part  of  the  capitalist  at  all.  The  story  of 
William,  the  good  young  man  who  saves  his  money 
and  lends  it  to  the  worthless  spendthrift  at  a 
handsome  rate  of  interest  to  repay  him  for  his 
abstinence,  is  a  fabrication  of  the  defender  of  the 
present  economic  system.  It  does  not  typify  the 
actual  state  of  affairs.  If  it  could  be  conceived, 
and  it  cannot,  as  having  ever  represented  the  facts, 
the  philanthropical  young  man  found  philanthropy 
so  pleasant  that  he  took  good  care  to  make  it 
impossible  for  the  spendthrift  ever  to  shake  him- 
self clear  of  the  yoke  that  is  not  easy.  According 
to  the  pretty  story,  William  happens  to  be  saving 
against   a    rainy    day    or   with    no   special    object, 

69 


Economic  Moralism 

and  nothing  is  farther  from  his  mind  than  the 
idea  of  saving  with  the  express  purpose  of 
exploiting  James.  But  the  sole  idea  of  the 
capitalist  is  to  exploit  James,  to  get  something 
for  nothing.  His  capital  he  never  wants  to  use 
up.  He  would  consider  it  the  greatest  possible 
calamity,  and  indeed  the  grossest  injustice,  if  he 
were  compelled  to  use  it  Up. 

The  person  who  economizes  and  saves  for  future 
use  is  not  defrauded  or  injured  if  others  use  his 
savings.  Indeed,  in  a  social  system  based  on  equal 
opportunity,  such  a  person  might  find  it  difficult 
to  save,  because  few  things  can  be  kept  long 
without  depreciation  or  entire  loss,  and  few  would 
want   to    borrow. 

It  is  frequently  said  that  there  would  be  no 
inducement  to  save  if  no  interest  were  obtainable. 
Professor  Sidgwick  points  out  the  absurdity  of 
such  a  supposition.  And  it  is  easily  seen  that, 
if  people  did  not  save,  they  would  reap  none  of 
the  benefits  of  saving.  If  they  wished  to  buy 
an  expensive  article,  say  a  motor-car  or  a  yacht, 
or  to  take  a  trip  round  the  world,  they  would  have 
to  save  up  for  it.  Moreover,  in  order  to  be 
supported  by  the  community  in  sickness  or  old 
age,  they  would  have  to  save  by  paying  a  tax 
to  the  commonwealth  for  the  support  of  those 
already  unfit  for  work.  But  as  we  shall  show 
later,  most  of  the  saving,  indeed  all  the  necessary 
social  saving,  i.e.  for  renewal  and  extension  of 
capital,  should  be  done  by  the  organized  com- 
munity,  and   not    by   individuals   as   now,   so    that 

70 


Rent,  Interest,  and  Profit 

there  will  be  none  of  the  evils  in  a  moralized 
economic  system  that  result  from  our  present 
system  of  individualistic  saving,  so  ably  exposed 
by  such  writers  as  Mr.  John  A.  Hobson  and  Mr. 
J.  M.  Robertson. 

There  is.  however,  a  truth  underlying  the  demand 
for  a  reward  of  abstinence,  although  it  has  abso- 
lutely no  force  in  present  conditions.  It  is  that, 
in  conditions  of  economic  equality  and  freedom, 
no  person  has  any  right  to  expect  others  to  raise 
new  capital  necessary  for  the  production  of  articles 
he  may  require,  if  he  is  able-bodied.  This  principle 
would  be  acted  upon  under  a  system  of  Economic 
Moralism.  All  capital  required  for  production 
would  be  held  as  public  property.  This  capital 
would  be  maintained  then,  just  as  capital  is 
maintained  now,  by  a  sufficient  charge  being  made 
for  the  articles  produced  to  cover  all  the  expenses 
of  production  and  maintenance  of  capital,  and  even 
to  provide  a  fund  for  the  expansion  of  production 
as  required.  For  new  enterprises  of  every  kind 
there  will  probably  be  more  than  sufficient  capital 
to  be  got,  without  interest  of  course,  from  those 
who  wish  to  save  for  one  object  or  another,  savings 
having  naturally  to  take  a  concrete  form.  But 
in  any  case  no  undertaking  will  be  supported  with 
capital  extracted  compulsorily  from  any  individuals 
but  those  for  whose  special  benefit  it  is  required.1 

Bohm-Bawerk,    the    Austrian    economist,    in    his 
voluminous  and  laboured  work  on  Interest,  main- 
tains that  present  wealth  is  worth  more  than  future 
1  Chapter  VI, 
71 


Economic  Moralism 

wealth,  and  that  interest  is  simply  payment  for  the 
difference  in  value.  But  it  is  by  no  means  the  case 
that  all  present  wealth  is  worth  more  than  future 
wealth,  for  wealth  is  in  its  various  forms  more 
or  less  perishable.  However,  apart  from  this,  it 
is,  as  has  already  been  pointed  out,  conceivable  and 
not  at  all  improbable  that  in  an  economic  system 
based  on  equal  opportunity,  the  desire  for  deferred 
consumption  would  be  so  great  that  future  wealth 
would  be  worth  more  than  present  wealth.  Interest 
can  be  exacted  now  because  such  a  large  propor- 
tion of  the  people  are  without  land  or  capital,  and 
are  therefore  at  the  mercy  of  the  owners  of  these, 
the  means  of  production.  Bohm-Bawerk  and  the 
orthodox  economists  who  have  assimilated  his  views 
overlook'  the  fact  that  the  question  is  not  a  merely 
economic  one  but  an  ethical  one,  and  that  it  is 
morally  unjustifiable  for  capitalists  to  take  advan- 
tage of  their  less  fortunate  fellows.  Bohm-Bawerk 
states  an  economic  fact  that  is  inseparable  from  an 
economic  system  based  on  the  monopoly  by  the 
few  of  the  means  of  production,  and  apparently 
imagines  that  the  mere  statement  of  the  fact  is 
its   ethical    justification. 

The  risk  and  the  abstinence  arguments  have 
been  considered,  as  well  as  Bohm-Bawerk's.  There 
is  still  Henry  George's  ingenious  argument.  Henry 
George  maintains  that  in  certain  branches  of 
industry  there  accrues  a  natural  interest  which  is 
due  to  the  generative  forces  of  Nature.  In  agricul- 
ture, for  instance,  labour  is  assisted  to  a  very  large 
extent  by  natural  forces.      Between  seed-time  and 

n 


Rent,   Interest,  and  Profit 

harvest  the  farmer  does  comparatively  little  in 
his  fields,  the  growth  of  his  crops  depending  chiefly 
on  the  seed,  the  soil,  and  the  atmospheric  condi- 
tions. Henry  George  holds  therefore  that  capital 
employed  in  such  industries,  in  which  it  has  the 
benefit  of  the  co-operation  of  Nature,  has  a  return 
which  capital  employed  in  the  manufacturing 
industries  has  not.  While  the  farmer  rests  from 
his  labours,  his  flocks  and  herds  and  crops  continue 
to  grow,  but  when  the  weaver  or  engineer  throws 
down  his  tools  or  stops  his  machines,  no  progress 
is  made  with  the  work  on  which  he  has  been 
engaged.  Henry  George  argues  therefore  that  it 
is  only  just  that  all  capital  should  be  put  on  the 
same  footing,  and  that  capital  that  does  not 
receive  a  natural  interest  or  increase  ought  to 
receive  an  artificial  one.  But  he  misses  the  point 
altogether,  which  is  to  show  why  any  capital  at 
all  should  receive  increase  at  the  expense  of 
labour,  or  rather  why  the  capitalists  should  receive 
it.  Not  only  so,  but  he  contradicts  his  own 
teaching.  For  the  whole  of  his  book',  "  Progress 
and  Poverty,"  with  the  exception  of  the  chapter 
on  Interest,  was  written  to  prove  that  private 
property  in  the  forces  of  Nature  should  be  abol- 
ished. He  proposes  to  nationalize  rent,  but  would 
allow  interest  to  go  scot  free  !  The  true  solution 
is  that  private  property  in  natural  forces  should 
be  abolished  in  such  wise  that  no  payment  could 
be  extracted  from  anybody  for  the  co-operation  of 
Nature.  The  price  of  a  commodity  should  depend 
on    the    average    amount    of    labour    required    for 

73 


Economic   Moralism 

its  production.  The  price  of  wheat,  for  instance, 
should  depend  on  the  average  amount  of  labour 
required  to  produce  it,  no  charge  being  made  for 
the  part  played   by  Nature. 

The  arguments  advanced  in  defence  of  usury 
having  been  examined,  and  no  justification  found 
that  can  be  traced  back  to  any  ethical  principle, 
the  arguments  against  usury  are  now  to  be  con- 
sidered. The  chief  and  all-sufficient  argument  is 
that  it  is  the  prime  cause  of  poverty.  It  is  the 
robbery  of  the  poor  because  they  are  poor.  The 
exaction  of  usury  keeps  the  people  poor.  Karl 
Marx  has  given  a  vivid  description  of  the  hideously 
cruel  manner  in  which  capital  has  been  accumu- 
lated. But  leaving  the  genesis  of  capital  alone 
and  assuming  for  convenience  of  argument  that 
it  has  been  accumulated  with  perfect  justice,  what 
call  does  morality  make  now  upon  the  capitalists  in 
their  present  position?  It  is  undeniable  that 
morality,  as  man  with  his  developed  social  sympa- 
thies understands  it  now,  inculcates  the  assistance 
of  the  weak  by  the  strong,  with  the  fullest  measure 
of  their  strength.  But  here  we  have  the  strong 
(that  is  to  say,  the  strong  in  economic  position) 
taking  the  fullest  advantage  of  the  weak.  By  their 
exaction  of  usury  they  keep  the  great  mass  of  the 
workers  in  the  depths  of  hopeless  poverty.  This 
action  of  theirs  can  be  traced  back  to  no  other 
principle  than  that  might  is  right.  And  that  prin- 
ciple is  the  negation  of  all  morality. 

In  the  preceding  chapter  we  dealt  with  the  root 
74 


Rent,   Interest,  and  Profit 

principles  of  morality  and  found  in  them  the  con- 
demnation of  usury.  Let  us  now  glance  at  the 
question  from  the  point  of  view  of  the  Christian 
Ethics.  The  countries  of  Western  civilization  are 
professedly  Christian,  and  appeal  may  therefore  be 
appropriately  made  to  Christian  Ethics.  Let  us 
consider  the  Christian  teaching  with  regard  to 
usury — that  is  to  say,  the  biblical,  the  early  and 
mediaeval  teaching,  for  in  modern  Christianity  there 
are  practically  no  independent  ideas  on  the  subject. 
The  commercialist  view  is  accepted  without 
question. 

From  the  very  earliest  times  the  usurer  has  been 
considered  the  enemy  of  the  human  race.  The 
Hebrew  word  translated  usury  signifies  the  biting 
as  of  a  serpent — that  is  to  say,  such  as  carries 
death  with  it,  even  when  the  wound  is  most 
insignificant.  The  Hebrew  Scriptures  condemn 
usury  unsparingly  as  between  Jew  and  Jew, 
although  the  Jew  was  permitted  to  "  oppress  " 
(note  the  word)  the  foreigner  with  usury.  "If 
you  lend  your  money  to  any  of  My  people  that 
is  poor  and  abideth  among  you,  you  shall  not  urge 
them  like  an  extortioner,  nor  oppress  them  with 
usury"  (Exod.  xxii.  25).  "If  thy  brother  be 
reduced  in  circumstances,  and  thou  shouldst  take 
him  into  thy  house,  take  not  usury  from  him,  nor 
more  than  thou  gavest  him.  Thou  shalt  not  give 
him  thy  money  at  usury,  nor  receive  increase  of 
rent"  (Lev.  xxv.  35).  'Thou  shalt  not  lend 
money,  fruit,  nor  any  other  article  to  thy  brother 
at  usury,  but  to  a  stranger.     Thou  shalt  afford  thy 

7$ 


Economic  Moralism 

brother  everything  he  shall  be  in  need  of  without 
usury"    (Deut.  xxiii.    19). 

What  can  capitalists,  who  with  few  exceptions 
parade  as  Christian,  say  to  this  law,  which  is  one 
of  those  Christ  approved  of?  They  have  managed 
to  obtain  possession  of  all  the  means  of  production 
men  stand  in  need  of  to  enable  them  to  work  and 
live.  It  matters  not  whether  they  obtained  pos- 
session honestly  and  justly,  as  they  themselves 
maintain,  or  forcibly  and  fraudulently,  as  can  be 
proved.  The  broad  fact  remains  that  they  own 
everything  their  brethren  are  in  urgent  need  of, 
and  to  obey  the  Divine  command  they  ought  to 
lend  their  brethren  everything  they  are  in  need  of 
without  usury.  But  what  do  these  Christian  capital- 
ists do?  They  extort  from  the  workers  more  than 
half  of  the  wealth  they  produce,  for  the  use  of 
the  land  and  capital  which  these,  their  brethren, 
are  in  utmost  need  of.  And,  strange  to  say,  the 
clergy,  with  few  exceptions,  justify  this  on  the  very 
ground  on  which  is  based  the  command  against 
usury.  They  say,  with  the  late  Professor  Flint,  that 
capital  (including  land,  of  course)  is  so  necessary 
to  the  workers,  that  they  ought  to  be  glad  to  pay 
for  the  use  of  it.  The  Bible,  on  the  contrary,  says 
that  precisely  because  people  are  in  need  of  any- 
thing, it  is  the  duty  of  those  who  possess  it  to 
lend  it,  expecting  no  return.  The  greater  the  need, 
the  greater  the  obligation  to  lend.  "  Lord,  who 
shall  inherit  Thy  tabernacle?  He  who  gave  not 
his  money  at  usury  and  received  not  gifts 
(Psa.  xv.   5).     "  Will  the  man  who  lends  at  usury 

76 


Rent,   Interest,  and  Profit 

and  receives  increase,  live?  he  will  not  live  " 
(Ezek.  xviii.    13). 

From  the  quotations  given  we  can  abstract  the 
Christian  definition  of  usury.  It  is  the  payment  to 
the  lender  of  anything  over  and  above  the  loan. 
St.  Jerome  says  :  "  Some  people  imagine  that 
usury  obtains  only  in  money.  But  the  Scriptures, 
foreseeing  this,  have  exploded  every  increase,  so 
that  you  cannot  receive  more  than  you  gave." 
The  same  view  is  held  by  St.  Augustine,  St. 
Ambrose,  and  other  early  expositors. 

But  it  is  said  that  the  Jews  were  permitted 
to  take  usury  from  foreigners,  and  that  therefore 
the  law  was  intended  for  the  Jewish  people  only, 
in  their  home  relations.  St.  Thomas,  however, 
says  :  "To  receive  usury  from  the  stranger  was 
not  permitted  as  a  lawful  thing,  but  rather  toler- 
ated for  avoiding  a  greater  evil,  and  this  dispen- 
sation is  not  extended  to  Christians,  who  are 
bound  to  consider  all  mankind  as  brethren, 
especially  under  the  New  Law  to  which  they  are 
called." 

That  Jesus  of  Nazareth  looked  upon  the  prac- 
tice of  usury  as  iniquitous  the  whole  tenor  of  His 
teaching  proves.  He  condemns  it  as  being  con- 
trary to  the  spirit  and  feeling  of  brotherhood.  He 
says  :  "  If  ye  lend  to  them  of  whom  ye  hope  to 
receive,  what  thank  have  ye?  for  sinners  lend  to 
sinners  to  receive  as  much  again.  But  love  your 
enemies,  and  do  good,  and  lend  hoping  for  nothing 
again."  Indeed,  the  only  construction  that  can 
logically   be  placed   on  this    is  that  not   onlv  did 

77 


Economic   Moralism 

He  disapprove  of  usury  but  even  of  the  expecta- 
tion of  the  return  of  the  principal  itself. 

The  parable  of  the  talents  is  frequently  advanced 
as  telling  in  favour  of  usury.  But,  on  the  contrary, 
it  makes  clearer  the  disapproval  with  which  usury 
was  regarded.  The  servant  with  one  pound  defied 
his  lord,  and  used  a  very  stupid  argument.  He  was 
pounced  upon  at  once  and  his  argument  was  turned 
against  him.  His  lord  said  :  "  Out  of  thine  own 
mouth  will  I  judge  thee,  thou  wicked  servant. 
Since  thou  knewest  that  I  am  an  austere  man, 
taking  up  that  I  laid  not  down,  and  reaping  that 
I  did  not  sow  ;  then  wherefore  gravest  thou  not 
my  money  into  the  bank,  and  I  at  my  coming 
should  have  required  it  with  interest?  "  Clearly 
it  was  considered  that  to  take  interest  was  to  take 
something  for  nothing,  to  live  on  unearned  income, 
and  that  this  was  characteristic  of  a  hard,  greedy, 
unjust  man. 

There  was  certainly  no  doubt  as  to  the  meaning 
of  Christ  on  the  part  of  His  early  followers,  on  the 
part  of  the  Christian  Fathers,  and  indeed  of  the 
Church  itself  up  to  a  comparatively  modern  period. 
The  Church  educated  public  opinion  on  the  matter 
in  such  wise  that  conduct  was  regulated  and  laws 
were  enacted  in  accordance  with  anti-usury  views. 
Of  course,  theory  or  opinion  was  not  always  entirely 
logical,  nor  was  the  practice  always  consistent. 
However,  in  this  country  at  one  time  the  commis- 
sion of  the  sin  of  usury  was  to  be  expiated  with 
three  years'  penance,  one  on  bread  and  water. 
At  another  time  the  usurer  was  outlawed  and  his 

73 


Rent,   Interest,  and  Profit 

property  confiscated.  Dante  expresses  mediaeval 
feeling  when  he  relegates  the  usurer  to  the  same 
circle  of  hell  as  the  people  of  Sodom  and 
Gomorrah.  We  have  ample  witness  to  prove  that 
up  to  the  Reformation  the  question  of  usury  was 
considered  of  great  importance  and  received  the 
closest  attention  of  the  Church. 

The  technical  names  given  to  the  various  kinds 
of  loans  show  how  carefully  each  was  considered 
and  justified  or  condemned.  Just  to  give  an  illus- 
tration or  two.     There  was  the  loan  called  Locatio 
et  Conductio,  for  which  the  lender  was  entitled  only 
to  hire — that  is,  to  payment  merely  for  the  wear 
and  tear   of  the  article,   he   remaining   responsible 
for  all  ordinary  risks,  such  as  loss  by  lightning  in 
the  case  of  a  house.    There  was  also  the  loan  called 
Matuum,  which  was  the  lending  of  something  which 
the  borrower  would  consume  or  use  up,  like  grain, 
returning  something  exactly  similar  at  the  end  of 
the  specified  period.     There  was  also  among  many 
others   the    loan    called    Venditio,    which    deserves 
special  attention.      It  was  the  lending  of  money  to 
a  merchant  or  trader  to  be  returned  with  a  share  of 
the  profits.      The   justification  of  this   loan   was   a 
vexed  question  among  moralists.     Many  condemned 
it  outright,  such  as  St.  Ambrose  and  St.  Augustine, 
who  considered  all  merchants'  gains  to  be  fraudu- 
lent.   The  Church,  however,  holding  that  merchants 
really  did  useful  work,  and  not  quite  seeing  where 
to   draw   the   line  between   legitimate   and  illegiti- 
mate remuneration,  at  last  took  tithes  on  merchants' 
profits.      Thus   was   admitted  the  thin  end  of  the 

79 


Economic   Moralism 

wedge  which  was  ultimately  to  overthrow  the  anti- 
usury  teaching  of  the  Church.  Besides  this  method 
of  obtaining  from  a  commercial  partnership  what 
was  essentially  usury,  there  were  other  ways  by 
which  the  greedy  and  unscrupulous  could  evade 
the  law  and  make  people  believe  that  their  actions 
were  consistent  with  justice  and  Christian  morality. 
Payment  was  sometimes  exacted  for  the  mere  possi- 
bility of  loss  or  inconvenience  arising  out  of  the 
failure  of  the  borrower  to  return  the  loan  at  the 
right  time,  although  this  practice  was  condemned 
without  qualification  by  Pope  Gregory  IX.  These 
exceptions  to  the  strict  letter  of  the  Canon  Law 
might  have  resulted,  as  Cunningham  says,  in  every 
loan  requiring  a  certain  amount  of  interest,  and 
the  whole  doctrine  might  have  become  a  dead 
letter.  But,  as  he  adds,  there  was  little  inclina- 
tion on  the  part  of  the  authorities  to  connive  at 
the  evasion  of  the  law,  and  the  common  sense  of  the 
public  agreed  in  these  matters  with  ecclesiastical 
decisions. 

The  break-up  of  the  system  became  definite 
at  the  Reformation  owing  to  a  variety  of  causes, 
which  it  is  not  necessary  to  consider  in  this  place. 
But  the  change  had  begun  long  before,  and  it 
was  due  in  part  to  the  ever-increasing  complexity 
of  the  economic  system,  which  rendered  it  difficult 
to  see  the  rightness  and  wrcngness  of  conduct 
in  economic  matters.  The  problem  became  too 
difficult,  and  moralists  got  bewildered.  Indeed, 
it  was  insoluble  with  society  developing  on  indi- 
vidualist lines.     The  only  possible  solution  lay,  in 

80 


Rent,  Interest,  and  Profit 

collectivist    co-operation,    and    the    world    lost    its 
way,  and  is  only  now  finding  out  its  mistake. 

But  the  great  reformers  never  quite  gave  up 
the  old  views.  Zwingli,  Luther,  and  Melanchthon 
considered  usury  to  be  contrary  to  the  ideal,  but 
thought  it  better  to  allow  interest  within  certain 
limits  as  a  compromise  with  the  imperfection  of 
man.  Calvin — even  Calvin — considered  it  not  to  be 
universally  permitted,  but  only  so  far  as  it  did  not 
run  counter  to  fairness  and  charity,  and  he  held 
that  no  interest  should  be  asked  from  men  in  urgent 
need.  But  are  not  the  workers — the  people  who 
possess  neither  land  nor  capital — in  urgent  need? 
Calvin,  like  many  others  before  and  after  hiim  was 
not  clear  on  the  economics  of  the  question.  In 
his  time  usury  had  unfortunately  come  to  be  con- 
sidered immoral  only  in  the  case  of  loan  interest, 
and  Calvin  therefore  thought  and  said  :  "  The 
borrower  is  not  defrauded  in  having  to  pay  interest, 
because  he  pays  it  out  of  the  gain  he  makes  with 
the  money."  But  how  does  the  borrower  make 
this  gain?  We  know  that  he  makes  it  out  of  the 
necessities  of  those  worse  off  than  himself.  Adam 
Smith  fell  into  the  same  error,  when  he  said  : 
"  As  something  can  everywhere  be  made  by  the 
use  of  money,  something  ought  to  be  paid  for 
the  use  of  it."  There  was  always  the  idea  of  a 
big  exploiter  exploiting  a  little  exploiter,  with  those 
really  exploited  at  the  bottom  of  the  scale  left  out 
of  account.  Regarding  the  same  thing,  Bohm- 
Bawerk  says  :  "  Translated  into  modern  termin- 
ology, this  idea  would  run  :    There  is  loan  interest 

81  F 


Economic  Moralism 

because  there  is  natural  interest."  But  again,  what 
is  the  origin  of  natural  interest?  From  whom  is 
it  extracted?  Natural  interest  must  be  justified, 
and  loan  interest  stands  or  falls  with  it.  And  yet 
Adam  Smith  had  a  glimmering  of  the  truth,  and 
Bohm-Bawerk  is  very  much  puzzled  in  conse- 
quence. As  this  learned  Austrian  economist  says  : 
"  Sometimes  he  represents  the  capitalists  as  a  class 
who  live  on  deduction  from  the  produce  of  other 
people's  labour,  and  compares  them  significantly 
with  people  who  love  to  reap  where  they  never 
sowed."  The  fact  that  capital  enables  labour  to 
be  more  productive  does  not  of  itself  justify  the 
appropriation  by  the  lender  of  any  of  the  fruits  of 
the  labour  of  the  borrower.  It  has  no  ethical 
signification  whatever. 

Time  could  profitably  be  given  to  the  consider- 
ation of  the  course  of  conduct  that  ought  to  be 
pursued  by  the  individual  who  arrives  at  the  con- 
clusion that  usury  (or  rent,  interest,  and  profit) 
is  immoral.  This  is  an  interesting  question  in 
Relative  Ethics,  but  it  is  not  one  that  the  workers 
need  trouble  much  about.  The  working  man  with 
a  few  pounds  laid  by  for  a  rainy  day  in  the  savings 
bank  or  in  the  co-operative  store  may  indeed 
receive  rent,  interest,  and  profit  on  his  savings, 
but  only  a  very  short-sighted  purist  would  condemn 
him  for  this,  because,  after  all,  he  is  really  only 
thereby  reducing  the  amount  of  plunder  taken  from 
him  by  the  capitalist  proper.  Suffice  it  to  say 
that  the  capitalist  system  cannot  be  reformed  by 
the  individual  trying  to  conform  in  that  system  to 

82 


Rent,   Interest,  and   Profit 

the  ethical  principles  enunciated  in  Absolute  Ethics 
with  regard  to  usury.  At  the  rise  of  Capitalism  the 
individual,  backed  up  by  training,  tradition,  public 
opinion,  and  all  the  force  of  the  Law  and  the 
Church,  was  ignominiously  defeated  in  his  attempt 
to  keep  true  to  the  anti-usury  ethics.  What  chance, 
then,  has  the  individual  now,  when  Capitalism  is 
at  its  zenith?  Usury  is  inevitable  in  a  complicated 
commercial  system  based  on  private  property  and 
individual  enterprise,  and  can  only  be  abolished, 
with  its  evil  consequences,  riches  and  poverty,  by 
taking  the  means  of  production  out  of  the  hands 
of  individuals  and  making  them  public  property, 
by  establishing   a   real  Commonwealth. 

We  have  now  proved  the  immorality  of  usury, 
not  only  from  the  ethical  principles  of  the  non- 
Christian  moralist,  but  from  the  Christian  ethics. 
As  John  Ruskin,  on  this  subject,  says  with  prophetic 
fervour  :  "  Any  honest  and  sensible  person,  if  he 
chooses,  can  think  out  the  truth  in  these  matters 
for  himself.  If  he  be  dishonest  or  foolish,  no  one 
can  teach  him.  If  he  is  resolved  to  find  reason 
or  excuse  for  things  as  they  are,  he  may  find 
refuge  in  one  lie  after  another,  and,  dislodged  from 
each  in  turn,  fly  from  the  last  back  to  the  one  he 
began  with.  But  there  will  not  be  long  need  for 
debate,  nor  time  for  it.  Not  all  the  lying  lips  of 
commercial  Europe  can  much  longer  deceive  the 
people  in  their  rapidly  increasing  distress,  nor 
arrest  their  straight  fight  with  the  cause  of  it. 
Through  what  confused  noise  and  garments  rolled 
in  blood,   through  what  burning  and  fuel  of  fire, 

83 


Economic   Moralism 

they  will  work  out  their  victory,  God  only  knows, 
nor  what  they  will  do  to  Barabbas  when  they  have 
found  out  that  he  is  a  robber  and  not  a  king. 
But  that  discovery  of  his  character  and  capacity 
draws  very  near,  and  no  less  change  in  the  world's 
ways   than    the   former    fall    of   Feudalism   itself." 


84 


CHAPTER    III 

THE   ERRORS   AND   DANGERS   OF   SOCIALISM 

After  considering  the  ethical  basis  of  Economics 
and  before  passing  to  the  economic  framework  of 
the  new  social  system,  we  must  devote  some  time 
to  the  criticism  of  Socialism,  which  has  for  nearly 
two  generations  been  before  the  world  as  an  ideal 
system  of  society,  and  has  met  with  considerable 
attention  and  some  support.  It  is  a  matter  for 
congratulation  that  the  main  reason  for  the  cold- 
ness with  which  Socialism  is  received  is  its 
identification  with  Communism,  for  such  reception 
is  evidence  of  a  sane,  healthy  state  of  the  public 
mind.  Little  real  attention  has  been  given  by 
Socialists  to  the  economic  reconstruction  of  society. 
A  good  deal  of  loose,  dreamy  speculation  has  been 
indulged  in  regarding  the  effect  of  Socialism  on 
religion,  art,  science,  social  life,  the  family,  and 
sexual  relations.  But  beyond  the  mere  enunciation 
and  parrot-like  repetition  of  the  cardinal  economic 
doctrine  of  Socialism— namely,  the  nationalization 
of  the  means  of  production  and  exchange— the 
necessary  but  rather  unattractive  work  of  theorizing 
on  the  economic  arrangements  of  the  future  has 

35 


Economic   Moralism 

not  merely  been  neglected,  but  has  been  dis- 
couraged as  Utopian  and  unscientific.  The  simple 
declaration  in  favour  of  the  public  ownership  of 
land  and  capital  is  vague  and  indefinite.  The 
consequence  is  that  people  are  mystified  regarding 
the  aims  of  Socialism,  and  Socialists  themselves 
have  no  clear  ideas  about  the  future.  The  latter, 
however,  frequently  and  emphatically  assert  that 
their  ideal  is  Communism.  In  this  connection  it 
will  be  sufficient  to  consider  here  the  views  of 
only  two  representative  British  Socialists,  Mr. 
Robert  Blatchford  and  Mr.   Keir  Hardie. 

William  Morris  is  generally  claimed  by  Com- 
munists as  belonging  to  their  school.  But  it  is 
by  no  means  clear  that  they  have  a  right  to  claim 
him.  He  indeed  called  himself  a  Communist.  But 
it  is  important  to  know  what  he  really  meant  by 
Communism.  Morris  as  an  artist  was  a  rebel 
against  the  fettering  of  mankind  with  rules  and 
regulations  from  without,  and  wrote  his  charming 
fantasy,  "  News  from  Nowhere,"  as  a  protest 
against  what  he  considered  the  cast-iron  system 
of  Bellamy's  "  Looking  Backward."  But  Morris 
as  a  practical  man  recognized  the  necessity  of 
"  economic  machinery  "  in  the  ideal  State.  What 
it  would  be  he  did  not  care  to  inquire.  He  was 
satisfied  to  say:  "Time  will  teach  us  what  new 
machinery  may  be  necessary  for  the  new  life." 
It  was  the  artistic  side  of  the  new  life  that 
interested  him.  In  his  lecture  on  "  Communism," 
published  by  the  Fabian  Society,  it  is  made  per- 
fectly clear  that  he  applied  the  term  "  Socialism  "  to 

86 


Errors  and  Dangers  of  Socialism 

the  transitional  stage  and  "  Communism  "  to  "  true 
and  complete  Socialism."  He  considered  the  term 
"  Socialism  "  as  having  been  degraded,  as  having 
come  to  mean  by  most  non-Socialists  mere  better- 
ment of  the  condition  of  the  working  people  up 
to  a  certain  point.  Morris  meant  by  "  Com- 
munism "  "  a  real  society  of  equals  " — "  a  society 
of  practical  equality."  He  says:  "I  think  the 
communization  of  the  means  of  industry  would 
speedily  be  followed  by  the  communization  of  its 
product— that  is,  that  there  would  be  complete 
equality  of  condition  amongst  all  men,  which  again 
does  not  mean  that  people  would  (all  round) 
use  their  neighbours'  coats,  or  houses,  or 
toothbrushes,  but  that  every  one,  whatever 
work  he  did,  would  have  the  opportunity  of 
satisfying  all  his  reasonable  needs  accord- 
ing to  the  admitted  standard  of  the  society  in 
which  he  lived— i.e.  without  robbing  any  other 
citizen."  Complete  equality,  then,  is  what  he 
means  by  "  the  communization  of  the  products." 
How  this  communization  would  be  effected  he  does 
not  consider.  To  illustrate  what  he  meant,  he 
said:  "An  anti-Socialist  will  say,  How  will  you 
sail  a  ship  in  a  socialist  condition?  How?  Why, 
with  a  captain  and  mates  and  sailing  master  and 
engineer  (if  it  be  a  steamer)  and  A.B.'s  and 
stokers,  and  so  on,  and  so  on.  Only  there  will 
be  no  first,  second,  and  third  class  among 
passengers ;  and  the  captain  and  the  stokers  will 
have  the  same  pay."  The  abolition,  not  of  "  Pay  " 
but   of   caste    and   class,    with    the   substitution   of 

87 


Economic  Moralism 

equality  of  conditions  and  remuneration,  was  what 
Morris  desired,  and,  as  will  be  seen  later,  Mr. 
Blatchford's  crude  Communism  would  be  worse 
than  useless  for  this  purpose. 

According  to  Mr.  Blatchford,  under  Ideal 
Socialism  or  Communism,  of  which  he  is  in  favour, 
"  there  would  be  no  money  at  all  and  no  wages. 
The  industry  of  the  country  would  be  organized 
and  managed  by  the  State,  much  as  the  Post  Office 
now  is;  goods  of  all  kinds  would  be  produced 
and  distributed  for  use,  and  not  for  sale,  in  such 
quantities  as  were  needed,  hours  of  labour  would 
be  fixed,  and  every  citizen  would  take  what  he 
or  she  desired  from  the  common  stock.  Food, 
clothing,  lodging,  fuel,  transit,  amusements,  and 
all  other  things  would  be  absolutely  free,  and  the 
only  difference  between  a  Prime  Minister  and  a 
collier  would  be  difference  of  rank  and  occupa- 
tion." Practical  Socialism,  out  of  which  Com- 
munism is  to  evolve,  he  regards  as  the  preliminary, 
transitional  stage.  He  considers  Communism  to 
be  simpler  and  to  have  less  machinery  about  it 
than  the  preliminary  Socialism,  and  he  thereby 
reveals  what  seems  to  be  at  the  bottom  of  much 
of  the  hankering  after  illusory  Communism — 
namely,  the  instinctive  horror  felt  by  artistic 
natures  for  all  kinds  of  "  economic  machinery." 
But  such  economic  complications  cannot  be  got 
rid  of,  so  long  as  the  division  and  subdivision  of 
labour  and  the  interdependence  of  all  parts  of 
each  country  and  of  the  world,  as  shown  by  the 
exchange  of  products,  persist.      In  the  desire  for 

88 


Errors  and  Dangers  of  Socialism 

Communism  we  find  the  yearnings  of  the  artist 
for  the  simple  life  and  of  the  commoner  sort  for 
a  perpetual  picnic,  a  free-and-easy,  irresponsible 
Skimpole  sort  of  existence.  Advocates  of  Com- 
munism should  ponder  over  Inspector  Bucket's 
weighing  up  of  Mr.  Skimpole:  "Whenever  a 
person  says  to  you  that  they  are  as  innocent  as 
can  be  in  all  concerning  money,  look  well  after 
your  own  money,  for  they  are  dead  certain  to 
collar  it  if  they  can;  whenever  a  person  pro- 
claims to  you,  '  In  worldly  matters  I  am  a  child,' 
you  consider  that  that  person  is  only  a-crying 
off  from  being  held  accountable,  and  you  have 
got  that  person's  number,  and  it  is  Number  One. 
.  .  .  Fast  and  loose  in  one  thing,  fast  and  loose 
in  everything  ;  I  never  knew  it  fail.  No  more 
will  you.      Nor  no  one." 

Mr.  Keir  Hardie,  in  his  book  "  From  Serfdom 
to  Socialism,"  speaks  of  Communism  as  "  the  final 
goal  of  Socialism."  He  says:  "State  Socialism, 
with  all  its  drawbacks— and  these  I  frankly  admit— 
will  prepare  the  way  for  free  Communism."  Again: 
"  The  slave  dreams  of  emancipation,  the  emanci- 
pated worker  of  citizenship,  the  enfranchised  citizen 
of  Socialism,  the  Socialist  of  Communism."  There 
is  evidence  that  Mr.  Hardie's  views  on  the  subject, 
like  those  of  many  others,  agnostics,  strange  to 
say,  as  well  as  Christians,  have  been  strongly 
influenced  by  a  sentimentalism  that  has  its  roots 
in  early  Christian  doctrine  and  practice.  The 
Christian  religion  has  sanctified  Communism.  Mr. 
Hardie    says    approvingly:     "Christianity    in    its 

89 


Economic  Moralism 

pristine  purity  had  Communism  as  its  invariable 
outcome,  and  for  nearly  seventeen  centuries  the 
common  people  and  their  leaders  believed  Com- 
munism and  Christianity  to  be  synonymous  terms." 
He  quotes  one  authority  as  follows :  "  For  seven 
hundred  years  almost  all  the  Fathers  of  the  Church 
considered  Communism  the  most  Christian  form  of 
social  organization."  Again:  "The  Sermon  on 
the  Mount,  whilst  it  perhaps  lends  but  small 
countenance  to  State  Socialism,  is  full  of  the  spirit 
of  pure  Communism.  Nay,  in  its  lofty  contempt 
for  thrift  and  forethought,  it  goes  far  in  advance 
of  anything  ever  put  forward  by  any  Communist, 
ancient  or  modern."  Also:  "Christianity  on  its 
social  side  can  never  be  realized,  if  it  is  to  be 
interpreted  in  the  light  of  Christ's  teaching,  until 
there  is  full  free  Communism,  and  the  very  idea 
of  private  property  has  disappeared  from  men's 
minds." 

It  is  regrettable  that  Socialist  thinkers  should 
speak  with  confident  approval  of  a  Communistic 
constitution  of  human  society  without  giving  closely 
reasoned  grounds  for  their  belief  in  its  justice 
and  desirability.  The  subject  imperatively  de- 
mands discussion,  but  something  more  is  wanted 
than  mere  dogmatic  assertion,  especially  when 
such  assertion  does  not  simply  deal  with  the 
Utopian  dreams  of  individuals,  but  serves  to  justify 
and  hasten  measures  for  immediate  application. 

Socialists  are  quite  evidently  under  the  impres- 
sion that  Communism  is  a  form  of  society  much 
superior    to    what    Mr.    Blatchford    calls    Practical 

90 


Errors  and  Dangers  of  Socialism 

Socialism,  and  that  the  natural  and  necessary 
evolution  is  from  Capitalism  to  Socialism  and  from 
Socialism  to  Communism.  Mr.  Blatchford  takes 
that  view,  ano  so  does  Mr.  Hardie.  But  it  is 
perfectly  clear  that  the  Capitalist  system  will  not 
necessarily  evolve  first  into  Socialism  and  then 
into  Communism,  but  may  develop,  and  is  de- 
veloping even  now  in  some  directions,  straight 
into  Communism.  There  has  already  been  an 
unconscious  drift,  in  which  Liberals  and  Conserva- 
tives have  been  most  conspicuous,  into  Commu- 
nistic institutions,  such  as  free  education  and  free 
libraries.  But  there  is  now  also  the  conscious 
movement  towards  Communism.  The  Labour 
Party  press  forward  among  their  chief  reforms 
free  meals  for  school  children,  while  the  Socialist 
and  Trade  Union  policy,  as  approved  by  an  over- 
whelming majority  at  the  Belfast  Conference, 
includes  the  free  maintenance  of  children.  The 
Independent  Labour  Party  go  farther,  and  advo- 
cate free  education  and  free  maintenance,  not  only 
at  the  school  but  at  the  university.  Up  to  what 
age  at  the  university,  and  whether  all  will  have 
the  right  to  a  university  education  or  only  a  select 
few,  are  questions  that  are  never  discussed  ;  in  fact, 
the  whole  question,  like  many  others  equally 
important,  has  been  neglected.  Recently,  too,  we 
have  had  free  railways,  free  tramways,  free  ocean 
transport,  and  free  municipal  baths  advocated  in 
the  Socialist  papers.  There  seems,  therefore,  to 
be  a  pretty  widely  manifested  desire  to  enter 
immediately    and    directly    into    Mr.     Blatchford's 

91 


Economic   Moral  ism 

Ideal  Socialism,  under  which  everything  would  be 
free.  Besides,  the  revolt  against  Capitalism 
naturally  encourages  Communistic  methods.  It 
seems,  and  is,  easier  to  give  doles  to  the  poor 
than  to  organize  a  social  system  in  which  there 
would  be  equality  of  opportunity,  and  the  rich 
naturally  would  rather  have  "  ransom  "  than 
Socialism.  Moreover,  the  special  taxation  of  the 
rich  for  social  purposes,  which  is  bound  to  come, 
will  tend  to  degenerate  into  taxation  of  all  for 
free  institutions.  In  fact,  all  attempts  to  attain  any 
measure  of  economic  justice  without  departing 
from  competitive  Capitalistic  conditions  are 
necessarily  Communistic,  and  operate  through 
free  institutions. 

It  is  quite  evident,  then,  that  it  is  now  we  must 
make  up  our  minds  as  to  the  merits  of  Communism. 
Mr.  Keir  Hardie,  however,  supposing  like  many 
that  Communism  lies  in  the  far  distant  future, 
evidently  deprecates  immediate  decision,  for  he 
says:  "To  dogmatize  about  the  form  which  the 
Socialist  State  shall  take  is  to  play  the  fool.  That 
is  a  matter  with  which  we  have  nothing  what- 
ever to  do.  It  belongs  to  the  future,  and  is  a 
matter  which  posterity  alone  can  decide.  .  .  .  We 
have  seen  how  mankind  when  left  free  has  always 
and  in  all  parts  of  the  world  naturally  turned 
to  Communism.  That  it  will  do  so  again  is  the 
most  likely  forecast  of  the  future  which  can  be 
made.  ..."  It  almost  seems  as  if  Mr.  Hardie 
here  throws  his  own  warning  to  the  winds ;  in 
any   case,   however,   his   forecast   of   the  future  is 

92 


Errors  and   Dangers  of  Socialism 

based  on  a  very  slender  theory  indeed.  But 
whether  Socialists  try  or  not  to  make  a  synthetic 
forecast  of  Socialism,  which,  by  the  way,  Dr. 
Anton  Menger  rightly  considers  "  not  only  strictly 
scientific,  but  absolutely  indispensable,  if  the 
Socialist  movement  is  even  partially  to  realize 
its  aims,"  it  must  be  insisted  that  the  choice  of 
Socialism  or  Communism  as  an  ideal  to  work 
for  need  not  involve  dogmatizing  about  the  far 
distant  future.  We  have  Communistic  institutions 
now,  and  are  constantly  having  them  added  to 
and  further  instalments  of  Communism  advocated. 
We  must  make  up  our  minds  now  about  Socialism 
or  Communism.  We  are  at  a  critical  period  of 
social  evolution,  and  if  we  take  the  wrong  road 
posterity  will  have  wearily  and  painfully  to  find 
the  right  one. 

The  Communism  Mr.  Keir  Hardie  refers  to  in 
his  book — the  Communism  of  the  great  popular 
movements  of  the  Middle  Ages — was  to  some 
extent  the  outcome  of  erroneous  religious  teach- 
ing, and  was  bound  up  with  religious  contempt 
for  the  goods  of  this  world;  for  by  far  the  greater 
part,  however,  it  was  not  Communism  at  all,  but 
a  demand  for  free  and  equal  access  for  all  to 
the  land,  and  freedom  from  feudal,  church,  and 
other  inequitable  dues  and  services.  Communism 
in  the  articles  of  consumption  was  never  popular, 
and  even  among  the  so-called  Communist  frater- 
nities of  the  Middle  Ages  and  the  Reformation 
period  it  was  practised  only  by  the  comparatively 
few   extremists.     Most   of   the   members   of   these 

93 


Economic  Moralism 

brotherhoods  merely  handed  over  what  they  con- 
sidered superfluities  into  a  common  stock  for  the 
poor.  The  Communism  of  these  movements  can- 
not be  regarded  by  us  as  an  ideal  to  be  struggled 
for,  but  merely  as  the  expression  of  the  religious 
and  ethical  feeling  of  the  time  regarding  the  social 
arrangements  of  an  economically  undeveloped 
period.  It  was  the  expression,  although  perhaps 
not  the  fitting  expression,  at  that  time,  of  the 
spirit  of  solidarity  and  mutual  help,  which  to- 
day in  our  totally  different  economic  circum- 
stances requires  quite  other  expression.  Only 
under  pressure  of  religious  fanaticism  or  in 
situations  of  dire  necessity  have  mankind  tolerated 
pure  Communism.  Mr.  H.  G.  Wells  relates  that 
the  younger  generation  of  Oneida  Community 
reared  in  Communism  revolted  to  an  individualism 
so  extreme  that  for  a  time  it  was  impossible  to 
borrow  even  a  hammer. 

It  is  impossible,  then,  to  agree  with  Mr.  Keir 
Hardie  when  he  holds  up  Communism  as  the  ideal 
on  the  ground  that  mankind  is  by  nature  inclined 
to  adopt  that  form  of  society.  There  is  further 
obstacle  to  agreement  when  he  hints  at  the  sacri- 
fice of  the  individual  for  the  benefit  of  society, 
apparently  in  defence  of  Communistic  submission. 
He  says  that  "  the  same  spirit  which  leads  the 
philanthropist  to  give  time  and  money  for  the 
amelioration  of  the  lot  of  the  poor  will,  in  the  days 
to  come  when  it  is  more  developed,  lead  the  same 
type  of  person  to  spend  their  strength  and  to  find 
their  highest  good  in  ministering   to  the  needs  of 

94 


Errors  and  Dangers  of  Socialism 

the    commonweal."      In    the   days   to    come,   how- 
ever,   society    will    be    organized    on    the    basis    of 
justice,   and  no   one  will   be   robbed   of   the   fruits 
of    his    labour.      The    vastly    greater    number    of 
people  requiring  help  now  from  the  philanthropist 
require  it  because  they  are  being  robbed  daily  by 
that  gentleman  and  his   capitalist  friends.       They 
could  help  themselves  if  they  had  the  chance.    That 
chance  they  will  get  under  a  system  of  Economic 
Moralism.      In    the    days    to    come    there   will    be 
only  the  crippled  and  the  diseased,  the  orphaned 
young,   and   the   sufferers   from   accidents   and  un- 
avoidable natural  catastrophes— there  will  be  only 
these  to  minister  to  the  needs  of,  and  the  organized 
community    will    provide    for    them,    the    burden, 
equally  shared   by  all   able-bodied   citizens,   being 
so  light  as  to  be  scarcely  felt.     The  old  will  have 
provided  for  their  old-age  pensions  themselves  by 
premiums    to    the    State,    and    the    young    will    be 
provided  for  by  their  parents,  of  which  more  anon. 
There   will    therefore    be   no   need    for   individuals 
to    sacrifice   themselves    and    spend   their    strength 
for  the   commonweal,   except  in   seldom   occurring 
circumstances.      There  will  doubtless  be  heroes  of 
the  mine   and   heroes    of    the   sea,    railway   heroes 
and    fire-brigade   heroes.      There   will    be   martyrs 
to  science  and  martyrs  in  industry.     Social  service 
requiring     extraordinary     personal     sacrifice     will 
always    call   forth    the   best   efforts   of   the   noblest 
men.      But,    apart    from   exceptional   demands   for 
heroism,  every  member  of  the  moralist  State,  after 
fulfilling     well-defined     and     comparatively     light 

95 


Economic   Moralism 

public  duties,  will  be  free  to  develop  his  indi- 
viduality to  the  full,  and  the  commonweal  will 
benefit  in  innumerable  ways  from  the  liberty  thus 
granted.  And  yet  in  a  sense,  no  doubt,  the 
Pauline  instruction  will  be  translated  into  modern 
terminology  and  obeyed:  "Whether  therefore  ye 
eat  or  drink,  or  whatsoever  ye  do,  do  all  to  the 
glory  of  God." 

Socialists,  still  haunted  by  the  nightmare  of  our 
present  vicious  social  system,  and  unable  to  rid 
their  minds  of  the  present  necessity  for  the  sacri- 
fice of  individuals  in  the  fight  for  the  social  and 
economic  emancipation  of  the  masses,  imagine  that 
the  spirit  of  self-sacrifice  will  be  intensified  in 
the  ideal  State.  There  will  be  little  or  no  need 
for  it.  Selfishness  and  all  anti-social  feelings  and 
actions  will  certainly  tend  to  disappear  and  be 
replaced  by  a  keen  sense  of  justice  and  solidarity. 
Sympathy  and  the  social  spirit  will  undoubtedly 
be  strengthened,  but  they  will  have  to  act  mainly 
on  spiritual  lines,  material  wants  being  auto- 
matically supplied  by  organized  society.  A  promi- 
nent Socialist  has  said:  "Most  of  my  Socialist 
friends  .  .  .  are  at  heart  Communists,  looking 
forward  to  the  day  when  none  shall  call  aught 
his  own  of  which  his  brother  hath  need."  But  it 
is  now  that  our  brother  hath  need.  Now  is  the 
time  for  the  practical  expression  of  this  sentiment 
by  Communists.  In  a  just  economic  system  there 
would  be  no  need  to  sacrifice  the  individual  to 
society.  Society  exists  for  the  individual,  and  not 
the   individual    for    society,    except    perhaps    in    a 

96 


Errors  and   Dangers  of  Socialism 

strictly  technical  scientific  sense.  Society  is  not 
an  entity  distinct  from  the  aggregate  of  individuals 
composing  it,  and  must  not  be  erected  into  a 
fetish.  As  Herbert  Spencer  says,  the  end  to  be 
achieved  by  the  State  is  the  welfare  of  its  units. 
Society,  he  says,  having  no  sentiency,  its  preserva- 
tion is  a  desideratum  only  as  subserving  individual 
sentiencies. 

It  is  well  to  look  this  question  of  self-sacrifice 
squarely  in  the  face,  for  by  a  natural  psycho- 
logical process  self-sacrifice  has  come  to  be  con- 
sidered in  certain  quarters  as  noble  and  divine  in 
itself,  and  therefore  as  justifying,  and,  indeed,  re- 
quiring, the  acquiescence  of  the  individual  in  what 
must  be  regarded  as  illegitimate  demands  of 
society.  It  is  well  to  recognize  that  it  is  at  best 
a  disagreeable  necessity,  and  that  all  need  for 
it  must  as  far  as  possible  be  done  away  with. 
The  selfish  many  have  in  all  ages  applauded  the 
preaching  of  self-sacrifice,  but  they  have  care- 
fully left  the  generous  few  to  practise  it,  and 
have  themselves  reaped  all  the  benefit,  which  is 
scarcely  just.  A  little  story,  credited  to  Sir 
William  Ramsay,  throws  some  light  on  the  riddle 
of  self-sacrifice.  Two  little  children  of  his 
acquaintance,  after  being  tucked  up  in  bed,  were 
heard  talking.  "  I  wonder  what  we  are  in  the 
world  for,"  said,  the  boy.  His  sister,  remember- 
ing the  lessons  she  had  been  taught,  replied,  "  To 
help  others."  "  Humph,"  said  the  boy,  "  then 
what  are  the  others  here  for?  " 

Since  Socialists  persist  in  their  attempts  to 
97  G 


Economic   Moralism 

introduce  Communism  now,  under  the  name  of 
Socialism,  and  do  not  really  relegate  it  to  the 
distant  future,  every  one  who  loves  justice,  liberty, 
and  true  fraternity  must  do  his  best  to  frustrate 
their  efforts.  Consequently  Communist  principles 
must  be  exposed  and  compared  with  the  prin- 
ciples of  morality  applied  to  economics — i.e. 
Communism  or  Socialism  must  be  compared 
with  Economic  Moralism. 

The  distinctive  and  differentiating  principle 
underlying  Moralist  economic  activities  is  that, 
while  the  capital  required  for  the  carrying  on  of 
these  activities  is  public  property,  the  cost  of  main- 
taining it,  as  well  as  the  cost  of  the  labour  and 
of  the  materials  required  for  the  production  of 
utilities,  is  borne  only  by  the  consumers  or  users 
of  these  utilities,  each  in  proportion  to  his  con- 
sumption. Only  those  who  actually  get  the  direct 
benefit  of  the  utilities  have  to  pay  for  them.  A 
price  covering  all  costs  is  placed  on  services  and 
commodities,  and  this  is  collected  from  the 
purchasers. 

The  following  are  some  of  the  Moralist  institu- 
tions at  present  wholly  or  partially  realized :  Under 
control  of  the  State,  there  are  the  postal  and 
telegraph  services,  as  well  as  its  incipient  banking 
and  insurance  services,  also  the  lighthouse  service ; 
while  under  local  public  control  there  are  works 
for  the  production  of  gas  and  electricity,  tram- 
ways, docks,  workmen's  dwellings,  public  baths,  etc. 

Unfortunately,  the  trail  of  capitalism  is  over 
all  these  activities  at  present,  rendering  them  im- 

98 


Errors  and   Dangers  of  Socialism 

perfect  from  the  point  of  view  of  Economic 
Moralism.  But  a  further  and  radical  application 
of  Moralist  principles  would  cause  shortcomings 
to  disappear,  and  would  lead  straight  to  complete 
Economic  Moralism— that  is,  the  public  ownership 
and  management  of  all  the  means  of  production, 
the  public  supply,  by  production  and  exchange, 
of  the  requirements  of  the  community— namely, 
shelter,  clothing,  food,  and  all  other  articles  and 
services  required  by  individual  members  of  the 
community,  the  co-ordination  of  all  economic 
activities  for  the  general  or  national  good,  and 
the  abolition  of  all  unearned  income,  except  to 
the  incapacitated,  the  remuneration  of  the  workers 
being  mainly  in  proportion  to  their  diligence. 

On  the  other  hand,  the  distinctive  principle 
underlying  Socialist  or  Communist  economic  activi- 
ties is  that  of  supplying  the  wants  of  the  individual 
at  the  public  expense,  by  public  free  services,  the 
cost  being  raised  by  the  taxation  in  one  form  or 
another  of  the  general  community,  as  against  the 
Moralist  principle  of  collecting  from  each  indi- 
vidual the  cost  of  what  is  actually  supplied  to  him. 
As  we  shall  see  later,  in  some,  but  only  in  some, 
public  services  the  Communist  principle  of  raising 
the  cost  by  taxation  is  justifiable,  for  the  sole 
reason  that  in  these  cases  it  is  the  only  one 
possible. 

The  following  are  some  Communist  and  semi- 
Communist  institutions  at  present  in  existence: 
Under  control  of  the  State  there  are  the  Army, 
the  Navy,  the  administration  of  the  law,  and  assist- 

99 


Economic  Moralism 

ance  to  science  and  arts ;  while  under  control  of 
local  public  authorities  there  are  sanitation  and 
hospitals,  workhouses,  police,  roads,  public  lighting, 
water,  education,  libraries,  and  parks. 

The  extension  of  economic  activities  on  the  same 
principle  would  lead  to  complete  Communism, 
which  would  mean  free  maintenance,  not  only  of 
children  but  of  adults,  in  short,  to  what  Mr. 
Blatchford  advocates — free  everything. 

But  leaving  generalities,  let  us  scrutinize  and 
compare  Moralist  and  Socialist  principles  in  their 
practical  application.  Take  a  simple  and  typical 
example  of  economic  reform.  In  many  cities  the 
tramways  are  now  public  property — at  least,  to 
the  extent  that  the  entire  management  is  in  the 
hands  of  the  public  authorities.  Unfortunately, 
tramways,  like  other  concerns  acquired  by  the 
public,  have  been  bought — and  at  too  high  a  price 
— with  borrowed  money,  and  until  the  loans,  raised 
on  the  public  credit,  have  been  paid  off  it  is  only 
by  a  stretch  of  the  imagination  that  such  concerns 
can  be  considered  public  property  at  all.  In  reality 
they  belong  to  the  bondholders,  although  managed 
to  a  certain  extent  for  the  good  of  the  public,  the 
fixed  rent  allowing  the  public  to  make  a  profit — 
or  a  loss — on  the  margin.  Besides,  nothing  being 
laid  aside  in  many  cases  for  depreciation,  the  public 
will  find  at  the  end  of  the  statutory  term  that, 
although  they  have  paid  off  the  bondholders,  they 
are  left  in  hand  with  a  property  that  requires 
almost  complete  renewal.  Consequently,  the  public 
will  have  to  continue  their  Sisyphus  labours,  and 

ioo 


Errors  and  Dangers  of  Socialism 

go  on  borrowing  and  paying  off  loans.  This  is 
merely  public  management  of  capitalist  property. 
What  is  wanted  is  the  complete  expropriation  of 
the  capitalist.  The  capitalist,  as  such,  has  no 
moral  right  to  unearned  income,  to  rent  or  interest, 
as  we  have  seen.  He  has  only  a  right  to  his 
principal,  and  even  that  is  doubtful  in  some  cases, 
if  closely  examined.  It  must  be  particularly  kept 
in  mind  that  step  by  step  with  municipalization 
and  nationalization  there  should  go  the  expro- 
priation of  the  capitalist,  by  the  special  taxation 
of  his  class  for  the  purpose  of  paying  off  loans 
raised  for  the  transference  of  property  from  private 
to  public  hands. 

However,  apart  from  this,  the  Moralist  method 
of  assessment  for  upkeep  is  at  present  in  vogue— 
namely,  that  of  charging  those  who  use  the  trams  a 
sum  equivalent  to  the  cost  of  the  services  rendered. 
According  to  the  Socialist  plan,  on  the  other  hand, 
no  charge  would  be  made  to  those  who  travel, 
all  the  expense  of  running  and  maintaining  the 
tramways  being  placed  on  the  rates. 

The  objection  to  this,  as  to  all  Communist 
schemes,  is  that  it  would  be  unjust,  and  would 
curb  the  liberty  of  the  individual.  Under  one 
form  of  taxation  or  another  those  who  do  not 
use  the  free  tramways,  or  the  free  theatres  or 
circuses,  or  any  other  free  institution,  are  never- 
theless to  be  taxed  in  order  to  allow  others  to 
have  the  use  of  them  free,  those  who  seldom  or 
never  use  them  are  to  pay  as  much  towards  the 
working  expenses  as  those  who  use  them  constantly. 

IOI 


Economic  Moralism 

Socialist — that  is,  Communist — taxation  would  be 
intolerable.  There  would  be  nothing  to  prevent 
waste  or  to  control  the  individual's  consumption, 
no  economic  curb  to  the  gratification  of  his  appe- 
tites and  desires,  in  so  far  as  they  might  be  pro- 
vided for  through  the  public  free  services.  On 
the  other  hand,  those  whose  demands  on  the  free 
services  might  be  insignificant  would  find  their 
time  taken  up  to  meet  taxes  for  objects  benefiting 
them  to  a  very  slight  extent  or  not  at  all. 
Imagine  the  artist,  the  scientist,  the  student,  or 
investigator  of  any  kind,  who  wants  all  the  time 
possible  for  pursuits  unappreciated  by  the  public, 
although  likely  to  benefit  them  in  the  long  run, 
who  is  willing  even  to  curtail  his  material  wants 
in  order  to  satisfy  his  mental  and  spiritual — imagine 
how  he  would  appreciate  having  to  meet  taxes 
for  the  benefit  of  the  careless,  unthinking  majority, 
perfectly  well  able  to  work  for  themselves.  Even 
the  ordinary  citizen  would  revolt  against  being 
forced  to  do  this. 

Instead  of  the  proper  public  officials,  as  under 
Economic  Moralism,  ascertaining  the  demands  of 
the  individual  members  of  the  community  and 
setting  out  to  have  them  supplied  in  full,  or  allow- 
ing private  to  supplement  public  effort,  instead 
of  allowing  people  to  order  what  they  want  and 
to  pay  for  what  they  get,  which  would  permit  of 
liberty  and  infinite  individuality,  under  Socialism 
all  the  energies  of  the  community  would  be 
absorbed  in  the  production  of  certain  commodities 
and    services    that    might    happen    to    be   in    great 

102 


Errors  and  Dangers  of  Socialism 

demand  by  the  majority.  It  would  be  left  to 
the  majority  to  say  through  their  representatives 
how  the  whole  community,  including  a  dissent- 
ing and  probably  large  minority,  would  have  to 
employ  their  time.  Scholars,  artists,  scientists,  and 
all  kinds  of  people  of  original  and  independent 
mind  would  be  driven  by  elected  mediocrities  to 
uncongenial  labour,  and  there  would  be  no  possible 
compensation  for  their  forced  and  unnecessary  toil 
on  behalf  of  fellow-citizens  as  able-bodied  as 
themselves. 

These  arguments  hold  good  against  Socialism 
in  general.  The  particular  instance  of  free  tram- 
ways has  been  selected  because  it  is  as  favourable 
an  illustration  as  Socialists  could  choose.  It  is 
held  that  free  tramways  would  be  as  reasonable 
as  are  free  roads,  free  bridges,  free  libraries,  and 
free  schools,  of  which  more  anon.  But  the 
question  has  never  been  fully  discussed,  and  yet 
a  vital  principle  of  Socialism  is  involved.  Many 
approve  of  free  tramways  as  a  logical  deduction 
from  the  general  principle  of  free  Communistic 
institutions.  But  free  tramways  are  also  advo- 
cated on  the  ground  that  the  system  would  be 
cheaper,  and  it  has  been  pointed  out  to  working- 
men  that  if  they  pay  £5  a  year  in  tramway  fares 
now,  they  would  pay  only  £3  if  the  tramway 
expenses  were  placed  on  the  rates.  But  what 
about  the  working-men  ratepayers  with  no  car 
line  between  their  dwellings  and  their  workshops? 
They  would  still  have  to  trudge  and  yet  pay  rates 
for  the  tramways  they  could  not  use.     And  what 

103 


Economic   Moralism 

about  those  who  from  choice  never  perhaps  use 
a  car  now  or  who  pay  far  less  than  £3  in  fares? 
The  Communist  arrangement  would  do  them  an 
injustice.  If  they  do  not  take  the  cars  because 
they  have  another  use  for  their  money,  why  force 
them  to  pay  for  others  less  economical  or  with 
different  tastes?  Great  emphasis  is  laid  on  the 
saving  that  would  result  from  the  abolition  (if 
possible)  of  conductors,  the  only  saving.  The 
Socialist  system,  however,  would  be  a  great  deal 
more  expensive  than  the  present,  for  a  much  better 
service  would  be  insisted  on.  A  few  citizens  would 
probably  not  use  the  cars  more  than  at  present, 
but  there  is  no  doubt  that  most  would  use  them, 
simply  because  they  were  free,  on  innumerable 
occasions,  when  they  would  never  dream  of  doing 
so  if  they  had  to  pay  to  a  conductor  the  actual 
cost  of  each  trip.  Every  ratepayer  would  feel 
aggrieved  if  he  could  not  get  a  car  whenever  he 
pleased,  and  therefore  the  service  would  be 
increased  enormously. 

In  short,  the  result  of  the  obliteration  of  prices 
would  be  that  economic  values  would  not  be  known 
or  comparative  values  calculable,  and  consequently 
every  citizen  would  actually  be  paying  indirectly 
for  commodities  and  services  on  which  he  would 
never  think  of  spending  money,  at  least  to  such 
an  extent,    if  he   had   to   pay  directly. 

Again,  take  the  Socialist  or  Communist  institu- 
tion of  free  education  and  the  more  extreme  pro- 
posal of  free  maintenance  of  children.  Since  free 
education  is   regarded  as  a  precedent   for  further 

104 


Errors  and  Dangers  of  Socialism 

instalments  of  Communism,  it  is  necessary  to  con- 
sider it  carefully  and  determine  at  whose  expense 
children  ought  to  be  educated. 

As  a  general  principle,  children  have  rights,  in 
which  they  ought  to  be  protected  by  society.  They 
are  entitled  to  receive,  not  simply  education  and 
a  beggarly  meal  once  a  day  when  at  school,  but 
shelter,  clothing,  food,  education,  and  every  proper 
attention  from  birth  until  economically  effective, 
either  from  their  parents  or  from  the  community. 
It  is  the  duty  of  society  to  see  that  the  children 
are  not  cheated  out  of  any  of  these  rights.  But 
reformers,  instead  of  trying  to  obtain  for  the 
children  as  an  immediate  instalment  what  is  merely 
an  insignificant  fraction  of  their  rights  during 
school  age  only,  by  means  of  a  Communistic 
measure  which  the  public  with  healthy  instinct 
oppose,  ought  to  insist  on  society  protecting  them 
at  once  in  all  their  rights  during  the  whole  period 
of  their  tutelage  and  getting  the  burden  put  on 
the  proper  shoulders — on  the  parents,  who  ought 
to  feel  it  no  burden.  This  would  secure  general 
support,  for  it  is  only  a  small  minority  of  parents 
who  are  vicious  or  negligent.  The  public  in  their 
lazy  way  are  not  unwilling  to  protect  the  children, 
but  will  not  assist  such  parents  to  shirk  their  duties. 

All  humane  people  admit  that  society's  first 
duty  is  to  get  the  children  cared  for.  This 
certainly  must  be  done,  and  if  impossible  on  the 
lines  of  Economic  Moralism,  then  on  Communist 
lines.  But  the  former  is  the  practicable  way,  and 
the    right    way.      However,    if    any    concession   to 

105 


Economic   Moralism 

Communism  be  made  in  the  present  system,  only- 
children  whose  parents  are  too  poor  to  pay  should 
be  kept  at  the  public  expense,  or  preferably  by 
a  special  tax  on  the  very  rich,  for  whose  benefit 
the  many  are  kept  poor — but  only  as  a  temporary 
expedient,  and  this  should  be  made  clear  to  the 
public.  As  a  matter  of  course,  orphans  and  those 
whose  parents  are  incapacitated  for  work  ought 
always  to  be  so  kept,  directly  or  indirectly.  If 
this  qualified  and  merely  temporary  Communism 
were  the  system,  inquiry  would  be  made  into 
the  cases  requiring  relief,  and  the  result  would 
almost  certainly  be  that  ere  long  the  public  would 
insist  on  work  and  proper  remuneration  being  pro- 
vided for  all,  which  would  remove  all  need  for 
Communistic  measures,  for  the  majority  hold  back 
because  of  the  evident  want  of  discrimination  in 
these  matters  between  the  deserving  and  the  un- 
deserving, the  consequence  being  that  the  children 
are  allowed  to  go  on  suffering.  As  regards  merely 
negligent  and  vicious  parents,  on  the  other  hand, 
these  ought  to  be  severely  and  effectively  dealt 
with.  In  such  cases  there  is  far  too  much  respect 
for  the  liberty  of  the  individual — the  adult  indi- 
vidual, that  is   to  say. 

The  logical  sequence  to  free  education  is 
certainly  entire  maintenance  of  children  at  the 
public  expense.  Free  education  and  free  main- 
tenance stand  or  fall  together.  But  let  us  for 
the  moment  consider  free  education  alone.  What 
are  the  arguments  in  favour  of  this  instalment 
of    Communism?     The    all-sufficient    argument    in 

1 06 


Errors  and  Dangers  of  Socialism 

the  opinion  of  most  people  is  that  the  general 
community  is  interested  in  having  well-educated 
citizens,  and  that  but  for  free  education  there  would 
be  a  dearth  of  these,  and  a  multitude  of  ignorant 
people,  who  would  not  merely  be  a  hindrance  in 
our  competition  with  other  nations,  but  would  fill 
our  jails  and  workhouses.  That  is  the  argument 
of  the  ordinary  rule -of -thumb  politician.  While 
always  maintaining  that  orphaned  children  and 
those  whose  parents  are  incapacitated  for  work 
must  be  cared  for,  and  cared  for  well,  by  the 
community,  the  Economic  Moralist  replies  that  the 
purpose  would  be  equally  served  by  education 
being  made  compulsory  at  the  expense  of  the 
parents,  facilities  of  course  in  the  shape  of  State 
schools  being  provided. 

The  supplementary  argument  (one  of  the 
slipshod  Socialist  kind)  is  that  large  numbers  of 
the  population  are  too  poor  to  pay  for  the 
education  of  their  children,  and  that  consequently 
education  must  be  at  the  expense  of  the  general 
body  of  ratepayers.  But  surely  the  proper  remedy 
is  to  make  certain  that  no  one  is  prevented  from 
getting  the  full  fruits  of  his  labour,  or,  in  the 
transition  period,  a  decent  living  wage.  If  the 
income  of  the  country  were  equitably  divided 
among  those  who  produce  it,  all  parents  would 
be  well  able  to  pay  for  the  education  of  their 
offspring.  The  argument  can  only  have  force  in 
a  capitalist  society,  for  everybody  would  be  able 
to  pay  under  a  just  system.  There  is  no  doubt 
that  all  normally  constituted  parents  take  pleasure 

107 


Economic  Moralism 

in  providing  by  their  own  efforts  for  the  wants 
of  their  children.  It  is  a  biological  law  common 
to  man  and  the  animals.  It  is  not  a  hardship 
except  to  perverted  or  criminal  natures.  The  hard- 
ship for  man  lies  in  his  being  prevented  from 
doing  this  effectively  and  to  his  full  satisfaction, 
owing  to  an  unjustly  inadequate  income.  This 
natural  instinct  ought  not  to  be  interfered  with 
or  weakened,  for  its  activity  tends  to  develop  in 
parents  a  more  acute  sense  of  their  wider  duties 
as  citizens.  Unfortunately,  the  privileged  classes 
take  the  view  that  it  is  better  to  grant  a  little 
Communism  in  the  shape  of  free  education  and 
a  daily  free  meal  than  real  justice,  which  would 
render   such    Communism   unnecessary. 

The  argument  that  education  ought  to  be  free 
because  it  is  compulsory  is  puerile.  On  the  same 
ground  the  State  should  bear  all  the  expense  to 
which  it  compels,  for  instance,  the  shipowner  to 
go,  in  carrying  out  the  Board  of  Trade  regula- 
tions in  connection  with  the  building  and  equipment 
of  his  ships. 

There  is  another  argument  which  seems  at  first 
sight  to  be  of  greater  force.  It  is  argued  that 
as  all  are  interested  in  having  the  population 
maintained,  every  able-bodied  person  ought  to 
contribute  towards  the  expense  of  maintaining  and 
educating  the  children.  Communistic  institutions 
under  the  present  system  receive  a  large  measure 
of  support  because  they  afford  an  apparent, 
although  in  reality  ineffective,  means  of  rectifying 
unjustly   unequal   incomes.      But   under  Economic 

1 08 


Errors  and  Dangers  of  Socialism 

Moralism,   with   all   incomes   settled   on   the   basis 
of  justice,   there  would   be  no   such  excuse.      The 
only    reason    for    educating    and    maintaining    the 
children  at  the  public  expense  in  those  days  would 
be   the    supposed   justice    of   causing   the   childless 
to  contribute  to  their     support.     If  this  were  just, 
it  would  be  the  very  refinement  of  justice,  so  much 
so    that    it    is    quite    clear    that    the    argument    is 
simply  an  afterthought.     Free  education  was  intro- 
duced for  quite  other  reasons  than  that  of  ensuring 
justice     between     man     and     man— reasons     that 
appealed  to   the  capitalist  class,  forced  as  it  was 
by  foreign   competition   to    have   a   working   class 
with  a  modicum  of  education.     If  the  insignificant 
proportion  of  the  total  expense  that  would  be  got 
from  the  childless  is  realized,  the  feebleness  of  the 
argument  is  seen  at  once.     Besides,  fancy  normal 
and    therefore    fortunate    human    beings,   who    are 
fulfilling    their    natural    mission,    clamouring    for 
compensation  from  the  comparatively  few  abnormal 
and  unfortunate  ones,  deprived,  in  ninety-nine  cases 
out  of  a  hundred,   by  circumstances  beyond  their 
control,   of   one   of   the   greatest   of   human   joys  ! 
But  in  what  respect  are  all  interested  in  having 
the    population    maintained?     This    parrot    cry    of 
"  the   social   duty   of   parentage,"   although   it   can 
be    traced    back     to    the     Biblical    command    to 
multiply   and   replenish   the   earth,   has   only   been 
heard   in    recent    times    since    the    militarists    took 
alarm  at   the  fall  of   the   birth-rate.      The  cry   is 
to    Dumdrudge    to    produce    plenty    of    food    for 
powder.      Malthusians   and   Neo-Malthusians  have 

109 


Economic  Moralism 

been  shouted  down.  It  is  the  fashion  now  to  make 
all  sorts  of  demands  on  the  individual  in  the  name 
of  society,  and  such  demands  require  to  be  closely 
scrutinized.  What  is  this  social  duty  of  parentage? 
Why  should  society  be  maintained,  if  the  indi- 
viduals composing  it  do  not  wish  to  perpetuate 
their  kind?  There  is  no  reason  at  all.  Duly 
whittled  down,  this  "  social  duty  "  is  found  to 
be,  at  the  core,  merely  a  protest  against  the 
horrible  injustice  of  allowing  the  few  who  can  be 
proved  to  have  selfishly  evaded  parentage  to  get 
in  their  old  age,  if  they  reach  it,  any  benefit  from 
the  labours  of  the  younger  generation  even  though 
they  pay  for  it.  Most  people  will  think  the  price 
of   such   superfine   justice   too   heavy. 

As  a  last  resort,  Socialists  have  recourse  to 
the  argument  that  it  is  convenient  for  parents  to 
have  their  outlays  for  children  spread  over  all 
their  working  years,  instead  of  crowded  into  the 
years  of  their  children's  minority.  Should  this 
be  so,  although  it  seems  far  from  being  the  case, 
any  arrangements  for  such  a  purpose  ought 
obviously  to  be  quite  voluntary.  There  is  no 
reason  why  the  State,  or  indeed  private  associa- 
tions, should  not  make  such  arrangements,  to  be 
taken  advantage  of  by  those  who  wish  to  do  so. 

It  may  be  said  that,  even  if  the  childless  ought 
not  to  be  made  to  contribute  to  the  education 
and  maintenance  of  children,  the  injustice  is  not 
worth  making  a  fuss  about,  at  all  events  to  the 
extent  of  upsetting  the  present  educational  arrange- 
ments.    That  may  be  so.     But  as  the  existence  of 

no 


Errors  and  Dangers  of  Socialism 

free  education  is  used  as  a  reason  for  increasing; 
Communist  institutions,  free  education  must  be 
exposed  in  full  ethical  light.  This  point  must 
be  emphasized.  Free  education  has  unfortunately 
come  to  be  considered  an  unassailable  institution. 
There  is,  perhaps,  no  need  for  a  special  crusade 
against  it  at  the  present  time,  for  it  may  be  to 
a  certain  extent  justifiable  on  the  score  of  expe- 
diency, when  established  in  a  society  based  on 
inequality  and  injustice.  But  it  is  necessary  to 
insist  that  it  is  indefensible  in  principle,  and  its 
use  as  a  base  of  operations  for  further  doses  of 
Communism  must  be  prevented.  The  corollary 
of  free  education,  namely,  the  entire  maintenance 
of  children  and  of  all  youths  right  through  the 
university,  would  entail  a  serious  advance  on  the 
expense  of  merely  elementary  education.  The 
Independent  Labour  Party  advocate  free  mainte- 
nance and  education,  not  only  at  school  but  at  the 
university.  How  is  this  to  be  managed?  Has  the 
State  to  pay  over  to  the  parents  periodically  a  sum 
to  cover  the  cost  of  their  children's  maintenance? 
or  to  ensure  its  proper  use,  has  it  to  give  all  the 
meals  in  the  school  and  university  dining-halls, 
and  all  the  clothes,  as  found  necessary,  at  the 
public  baths,  and  so  on?  Beyond  a  doubt,  if 
the  public  authorities  are  allowed  to  extract  from 
parents  the  money  the  latter  at  present  use  for 
the  maintenance  of  their  children,  and  to  pay  it 
back  to  them  for  the  same  purpose,  the  tendency 
will  be  more  and  more  for  these  authorities  to 
take  the  spending  power  out  of  the  parents'  hands 

in 


Economic   Moralism 

and  deal  directly  with  and  for  the  children.  The 
people  will  never  tolerate  State  endowment  of  the 
home,  but  if  they  did,  the  system  would  certainly 
tend  to  destroy  the  home.  And  after  all,  why 
depart  from  Nature's  plan  of  having  children 
reared  and  maintained  by  their  parents?  Why  run 
counter   to   the   best    instincts   of   the   race? 

Apart  from  all  the  questions  as  to  the  mere 
allocation  of  the  cost,  the  mere  question  of  financial 
justice,  there  must  be  considered  the  effect  of  such 
a  change  upon  the  parents  and  the  children,  and 
upon  their  mutual  relations.  If  parents  are 
relieved  of  the  maintenance,  and  consequently  in 
great  part  of  the  management,  of  their  children, 
their  close  interest  in  them  will  of  necessity  be 
lessened.  The  children,  too,  will  be  unresponsive 
to  those  who  come  little  in  contact  with  them, 
and  have  such  slight  control  over  them.  The 
bond  of  affection  will  be  loosened.  Parental  and 
filial  love  will  wane.  The  home  as  the  best  possible 
training  school  of  the  citizen  will  no  longer  exist. 
The  Communist  arrangement  too  would  tend  to 
turn  out  children  all  after  one  pattern,  with  little 
or  no  individuality.  Children  require  particular 
and  individual  treatment,  which  teachers  and 
monitors  dealing  with  them  in  large  numbers  can- 
not give.  Only  the  parents,  knowing  intimately  the 
peculiarities  in  constitution  and  temperament  of 
their  children,  can  give  this.  Indeed,  the  line  of 
progress  seems  to  lie  in  throwing  even  more 
responsibility  on  the  parents  than  at  present.  The 
ideal    rearers    and    trainers    of    children    are    the 

112 


Errors  and  Dangers  of  Socialism 

parents,  if  they  are  capable  and  have  the  time. 
And  ere  long  all  parents  will  be  capable  and 
will  have  the  time.  True  love  of  children,  united 
to  sympathetic  and  intimate  knowledge  of  each 
individual,  is  the  supreme  qualification  of  the  rearer 
and  educator  of  youth,  and  in  the  parent  more  than 
in  any  hired  person  is  this  qualification  likely  to 
be  found. 

It  is  such  proposals  as  the  public  maintenance 
of  children  that  naturally  give  rise  to  the  charge 
against  Socialism  of  breaking  up  the  family. 
Another  of  these  proposals — a  bare  suggestion 
rather,  constantly  iterated,  yet  without  a  trace  of 
constructive  thought — is  the  State  endowment  of 
mothers.  Certainly,  Economic  Moralists  will  agree 
that  every  widow  with  dependent  children  (and 
widowers,  too,  it  must  be  allowed,  should  be  put 
on  a  similar  footing)  ought  to  be  granted  a 
State  allowance  equal  to  what  she  and  her  family 
have  lost  through  the  death  of  her  husband  ;  but 
in  proportion  as  her  duties  to  her  children  become 
lighter,  she  should  have  the  pension  reduced,  and 
be  provided  with  suitable  work,  for  no  able-bodied 
person  of  either  sex  should  be  supported  at  the 
public  expense.  But  to  relieve  the  woman  from 
"  economic  dependence  on  her  husband  "  by 
granting  her  in  every  case  a  State  pension  does 
not  seem  justifiable.  It  would  be  unnecessary, 
because  under  Economic  Moralism,  with  the  right 
to  suitable  work  and  full  remuneration  for  it 
guaranteed  to  every  one  (and  an  approximation 
to   this   in   the   transitional   period),   every   woman 

113  H 


Economic  Moralism 

would  be  economically  independent  of  her  husband 
if  she  did  not  choose  to  attend  to  what  are  at  present 
considered  her  domestic  duties.  It  is  only  when 
the  rights  of  the  children  come  into  the  problem 
that  there  is  any  difficulty.  Both  parents  must  be 
held  jointly  responsible  for  the  proper  upbringing 
of  their  children.  If  a  man  and  his  wife  cannot 
live  together  on  terms  of  equality  and  amity — 
if  the  woman,  while  bearing  and  tending  the 
children,  does  not  get  a  fair  share  of  her 
husband's  income  (for  marriage  is  economically 
a  partnership),  and  has  to  work  harder  than  he 
does,  these  would  be  reasonable  grounds  for  forcing 
the  man  to  contribute  in  due  measure  to  the 
support  of  wife  and  children,  and  perhaps  even 
for  annulling  the  marriage  also,  but  they  would 
be  no  justification  whatever  for  the  State,  by 
making  a  contribution  to  the  woman  from  the 
public  purse,  to  encourage  the  man  to  shirk  his 
responsibility.  And  women  ought  not  to  be 
encouraged  by  a  State  endowment  to  marry  men 
of  this  stamp  ;  the  perpetuation  of  the  race  by 
such  contemptible  creatures  is  a  social  calamity. 
Strictly,  a  wife  who  attends  to  home  and  children 
has  in  equity  a  right  to  the  half  of  her  husband's 
income  and  no  harder  work  than  his,  and  each 
ought  to  contribute  equally  to  the  family  expenses. 
By  marriage  the  man  and  the  woman  sacrifice 
their  independence  (although  under  Economic 
Moralism  and  "during  the  transitional  period  neither 
would  sacrifice  economic  independence)  in  order  to 
gain  something"  greater.     There  seems  no  reason 

114 


Errors  and  Dangers  of  Socialism 

whatever  for  endowing  maternity.  The  proposal 
is  part  and  parcel  of  the  project,  already  con- 
sidered, of  taxing  the  childless  for  the  mainte- 
nance of  children.  The  economic  freedom  of 
woman,  the  perfect  political,  social,  and  economic 
equality  of  man  and  woman,  can  be  attained  in  a 
more  reasonable  and  natural  way.  It  is  remark- 
able that  Socialists  should  advocate  free  institu- 
tions, or  community  of  goods  in  the  State,  and  yet 
decry  it  in  the  family  to  the  extent  of  insisting 
on  a  separate  purse  for  the  woman,  provided  by 
the  State.  Communism  in  the  family  is  the  only 
Communism  at  all  defensible,  and  yet  there  is 
revolt  against  it. 

There  is  another  and  very  important  question 
in  connection  with  Communism,  which,  however, 
opens  up  too  wide  a  field  to  be  dealt  with  here. 
It  is  the  question  of  the  Law  of  Wages.  If  free 
maintenance  of  children  be  provided,  wages  would 
fall.  Provide  free  houses,  and  wages  would  fall 
still  farther.  This  is  one  of  the  serious  objections 
to  partial  and  piecemeal  Communism.  Under  the 
present  system  of  private  property  in  land  and 
capital,  any  supposed  advantages  are  illusory.  No 
one  would  benefit.  We  should  be  no  nearer  our 
goal.  We  should  have  precisely  the  same  state  of 
affairs  as  under  the  old  Poor  Law,  when  the  capital- 
ists deliberately  reduced  the  wages  of  the  workers 
below  subsistence  level,  knowing  that  they  would 
be  augmented  at  the  expense  of  the  ratepayers  in 
general. 

ii5 


Economic  Moralism 

It  has  already  been  said  that  certain  public  ser- 
vices must  by  their  very  nature  be  conducted  on 
the  Communist-like  basis  of  taxation,  instead  of 
according  to  the  Moralist  method  of  individual 
voluntary  purchase.  But  they  are  not  really  Com- 
munistic, because  the  taxation  for  them  is  generally, 
and  ought  to  be  always,  levied  with  the  view  of 
reaching  only  those  who  derive  benefit  from  the 
services,  and  as  nearly  as  possible  in  proportion 
to  that  benefit.  These  services  must  be  main- 
tained by  taxation,  because  no  other  method  is 
practicable.  For  instance,  the  Army,  the  Navy, 
and  the  police  protect  the  life  and  property  of 
all,  and  consequently  all  able-bodied  citizens  must 
pay  for  this  protection.  But  as  the  protection  is 
continuous,  unceasing,  and  not  intermittent,  or  con- 
tingent on  the  will  of  the  individual  citizen,  he 
cannot  buy  five  shillings'  worth  at  a  time  as  he  can 
hire  a  seat  in  the  theatre.  By  the  very  nature  of  the 
services,  and  the  need  of  all  for  them,  they  can  be 
maintained  only  by  taxation,  or  the  collection  from 
each  individual  of  his  share  of  the  total  cost  over  a 
given  period.  And  just  in  so  far  as  services  have 
these  characteristics,  they  must  be  similarly  main- 
tained. But  the  admission  of  public  services  into 
this  category  must  be  granted  cautiously.  A 
jealous  watch  must  be  kept  on  all  attempts  to 
extend  the  principles  of  taxation  to  services  capable 
of  being  conducted  on  the  lines  of  "  pay  as 
you  go." 

Now,  certain  services  that  are  continuous  and 
incapable  of  sale  in  definite  portions,  are  yet  not 

116 


Errors  and  Dangers  ot  Socialism 

of  equal  benefit  to  all.  Consequently  the  attempt 
should  be  made,  and  frequently  is  made,  to  assess 
the  citizens  in  proportion  to  the  benefit  received. 
This  method  is  certainly  not  Communistic,  for  the 
Communist  proposal  is  to  have  everything  free 
and  to  take  no  measures  to  make  use  or  enjoyment 
commensurate  with  productive  effort.  For  instance, 
for  the  maintenance  of  the  lighthouse  service,  a 
service  that  might  almost  be  said  to  be  of  equal 
benefit  to  all,  dues  are  levied  each  voyage  on 
every  ship  in  proportion  to  the  size  of  the  ship  and 
the  number  of  lighthouses  it  passes.  Such  taxa- 
tion is  ultimately  paid  in  approximately  proper 
proportion  by  those  for  whose  special  benefit  the 
dangers  of  navigation  are  mitigated,  namely,  the 
passengers  and  the  consumers  of  sea-carried 
goods. 

Take  the  case  of  the  public  roads.  The  abolition 
of  the  tolls  is  generally  looked  upon  as  a  progres- 
sive step,  and  perhaps  it  may  justly  be  so  con- 
sidered. But,  for  all  that,  the  Socialist  argument 
cannot  be  admitted  as  valid,  namely,  that  as  tolls 
have  been  abolished  and  free  roads  established, 
so  should  railways  and  tramways  be  free.  It  is 
worth  while  giving  attention  to  this  matter.  The 
incidence  of  taxation  for  roads  has  not  been  kept 
altogether  on  right  lines  since  the  abolition  of 
tolls,  and  it  requires  revision.  Undoubtedly,  the 
turnpike  toll  system  had  its  drawbacks  ;  it  was 
inconvenient  for  vehicles  to  have  to  stop  every  few 
miles  to  pay  tolls,  and  the  system  of  collection  was 
expensive.      But    it   had    its    advantages  ;     if-toll- 

ii7 


Economic  Moralism 

bars  had  still  existed,  motor-cars,  which  are 
admittedly  responsible  for  extremely  heavy  damage 
to  the  roads,  would  have  had  at  once  an  equivalently 
heavy  tax  imposed  on  them.  Now  the  wealthy 
owners  get  off  with  a  very  small  payment  in  pro- 
portion to  the  damage  they  do.  There  r  no  reason 
why  a  special  road  tax  should  not  be  levied, 
periodically,  on  all  vehicles  in  proportion  to  the 
estimated  wear  and  tear  they  are  responsible  for. 
The  rates  levied  at  the  toll-bars  were  devised  with 
this  object  in  view.  With  their  abolition  the  new 
rates  were  levied  on  owners  and  occupiers  irre- 
spective of  the  damage  done  by  the  ratepayers, 
the  consequence  being  that  working  men  and  other 
foot  passengers  have  an  extra  and  heavy  payment 
to  make  for  nearly  all  the  damage  done  by  heavy 
motor  and  other  vehicular  traffic.  A  periodical 
tax  should  be  put  on  foot  passengers — that  is, 
on  the  general  community — and  it  should  be  a 
comparatively  light  one,  while  there  should  be 
recovered  from  individuals  and  industries  the  cost 
of  the  destruction  of  the  roads  caused  by  their 
vehicles,  which  is  easily  enough  calculable  and 
adjustable.  There  is  therefore  no  ground  for  the 
Socialist  argument  that  tramways  and  railways 
should  be  free  in  the  Socialist  sense — in  the  sense 
of  the  total  divorce  of  the  use  or  enjoyment  of 
services  or  commodities  from  the  payment  for  them. 
Besides,  roads  cannot  be  placed  in  the  same  cate- 
gory as  tramways.  One  cannot  step  out  of  one's 
house  without  making  use  of  the  roads,  but  there 
is  no  like  necessity  to  use  the  cars. 

118 


Errors  and  Dangers  of  Socialism 

The  discussion  of  Economic  Moralism  versus 
Socialism  would  be  incomplete  without  some  con- 
sideration of  the  principles  according  to  which 
labour  ought  to  be  remunerated.  The  impression 
exists  that  under  Socialism  the  individual  would 
receive  an  allowance  in  some  way  in  proportion  to 
his  needs — a  most  indefinite  standard.  Under 
Economic  Moralism  he  would  be  rewarded  in  pro- 
portion to  his  actual  work.  The  vagueness  of 
the  Socialist  proposal  renders  it  somewhat  difficult 
to  deal  with.  But  if  we  look  into  what  is 
probably  the  inmost  meaning  of  these  apparently 
antagonistic  principles,  we  find  a  possibility  of 
conciliation  and  agreement.  The  Socialist  has  an 
honourable  and  praiseworthy  desire  to  secure  the 
protection  of  the  weak.  He  therefore  insists  that  as 
an  act  of  justice  the  equal  need  of  all  individuals, 
whether  weak  or  strong,  for  the  necessaries,  com- 
forts, and  luxuries  of  life  should  be  recognized  in 
practice.  That  is  his  sweeping  demand,  which  he 
maintains  for  the  reason  that  the  economically 
unfit,  those  incapacitated  for  work  by  any  infirmity, 
temporary  or  permanent,  ought  not  in  justice  to 
suffer  economically  in  consequence  of  their  inca- 
pacity. The  Economic  Moralist  agrees  with  this 
in  principle,  but  has  a  different  remedy.  He 
contemplates  providing  specially  for  such  people 
out  of  the  national  treasury,  so  that  they  would  be 
as  well  off  as  if  they  had  been  able  and  willing  to 
earn  their  living.  The  same  principle  would  hold 
good  in  the  case  of  actual  workers  less  capable  than 
their  fellows.    But  here  it  would  be  more  difficult  to 

119 


Economic  Moralism 

apply  it,  for  it  is  not  easy  to  distinguish  genuine 
inability  from  indolence  and  malingering.  It  is 
admitted  that  all  workers  are  not  equally  capable, 
although  in  the  case  of  the  great  majority  there 
is  really  little  difference,  very  few  being  much  over 
or  much  under  the  average.  Some  can  certainly 
turn  out  equally  good  work  at  a  greater  speed  than 
others.  Nevertheless,  according  to  the  Moralist 
precept  that  we  should  bear  one  another's  burdens 
(that  is,  the  consequences  of  accidents  and  of 
personal  infirmities  incurable  by  economic  pres- 
surej),  they  ought  to  get  only  the  same  remuneration 
as  those  who,  with  equal  diligence,  turn  out  less 
work  in  the  same  time.  This  is  quite  acceptable 
in  theory,  but  in  practice,  as  has  been  said,  a 
great  difficulty  lies  in  the  discriminating  of  the 
diligent  but  slow  worker  from  the  lazy.  In  fact, 
discrimination  is  practically  impossible  except  by 
the  test  of  economic  reward.  It  seems  advisable, 
then,  to  remunerate  workers,  as  far  as  possible,  not 
in  proportion  to  the  time  they  have  worked,  but  in 
proportion  to  the  quantity  and  quality  of  the  work 
actually  done,  in  order  to  correct  laziness  and  pre- 
ventable incompetence. 

But  this  check  on  labour  does  not  necessarily 
defeat  the  Socialist  principle,  for  the  incurably 
slow  or  incompetent  at  certain  work  need  not 
remain  at  work  for  which  they  are  evidently  unfit. 
Suitable  employment  could  be  easily  found  for  them 
in  other  and  equally  useful  departments  of  labour, 
where  they  would  be  able  to  earn  as  much  as  any, 
one.      For  equivalence  of  functions   is   a  Moralist 

120 


Errors  and  Dangers  of  Socialism 

principle  ;  under  Economic  Moralism,  all  kinds  of 
workers  will  be  equally  esteemed  and  as  far  as 
justly  possible  equally  remunerated,  due  allowance, 
however,  being  made  for  unavoidably  disagree- 
able or  unpopular  work — vide  Blatchford's  Prime 
Minister  and  collier  under  Communism.  At  the 
same  time,  the  utmost  discretion  consistent  with 
public  economic  efficiency  would  be  allowed  the 
individual  as  to  the  amount  of  work  he  would  have 
to  do.  Remuneration  being  in  proportion  to  work, 
the  work  done  by  the  individual  would  vary  with 
his  desire  for  commodities  and  services.  The  most 
potent  factor  in  the  economic  activity  of  ordinary 
mortals  is  the  prospect  of  reaping  the  fruits  of 
that  activity,  and  only  to  the  sentimentalist  does 
this  natural  motive  seem  sordid.  Socialism  short- 
sightedly proposes  to  disregard  it. 

With  respect  to  the  much  debated  question  of 
the  reward  of  genius,  the  rarer  kinds  of  aptitudes 
and  abilities  should  not  in  equity  receive  a  higher 
rate  of  remuneration  than  the  common  kinds. 
Genius  is  its  own  reward,  and  all  it  really  demands 
is  opportunity  for  its  exercise. 

Enough  has  been  said  to  demonstrate  the  ethical 
and  economic  superiority  of  Economic  Moralism 
over  Socialism,  and  the  necessity  for  discarding  the 
latter.  The  main  contention,  namely,  that  the 
Moralist  method  of  giving  individuals  in  some  kind 
of  currency  the  value  of  the  socially  useful  work 
they  do,  and  of  allowing  them  to  demand  and 
receive  any  commodities  and  services  they  are  ready 

121 


Economic  Moralism 

to  pay  for,  and  to  pay  for  them  in  proportion  to 
their  cost,  is  preferable  from  every  point  of  view 
to  the  Socialist  principle  of  providing  gratis  only 
such  commodities  and  services  as  the  majority  may 
think  necessary,  by  the  forced  labour  of  everybody, 
including  the  dissenting  minority. 

It  is  frequently  said  that  in  a  truly  democratic 
State  there  could  be  no  State  tyranny,  that  the 
people  could  not  enslave  the  people.  But  the 
individual  under  Socialism  would  of  necessity  be 
tyrannized  over  by  the  majority,  not  intentionally, 
but  because  tyranny  would  necessarily  result  from 
the  system,  even  if  every  citizen  had  all  the  virtues 
of  an  archangel. 

Economic  Moralism,  on  the  other  hand,  stands 
for  freedom  and  justice,  and  yet  really  includes 
what  Socialists  mistakenly  imagine  Socialism  alone 
to  stand  for,  namely,  solidarity  and  mutual  help. 


122 


PART    II 
THE    ECONOMIC    FRAMEWORK 


SECTION    I 

THE   IDEAL:    BASED   ON  ABSOLUTE   ETHICS 

CHAPTER    IV 

PUBLIC   OWNERSHIP   OF   THE   MEANS 
OF  PRODUCTION 

The  ethical  basis  of  economics  having  been  dis- 
cussed, the  ideal  economic  framework  of  society — 
that  is,  its  economic  structure  as  suggested  by 
Absolute  Ethics — must  now  be  considered.  In 
doing  this  we  must  avoid  the  errors  of  the  Utopists, 
who  were  led  into  them  by  the  hopelessness  of 
concerted  national  and  international  action  in  their 
time,  and  we  must  build  up  our  ideal  on  the 
lines  now  indicated  very  clearly  by  modern 
economic   evolution. 

Only  after  developing  our  ideal  in  its  broad 
features  can  we  consider  the  shortest  and  most 
practicable  way  of  realizing  it,  and  see  what  steps 
can  be  taken  in  that  direction  in  our  present  stage 
of  social  progress  that  would  be  justified  by 
Relative   Ethics. 

125 


Economic  Moralism 

The  main  principle  that  has  emerged  from  our 
ethical  investigation  is  the  public  ownership  and 
management  of  the  means  of  production,  this  being 
the  only  method  of  securing  'justice  and  economic 
independence  in  the  modern  system  of  wealth  pro- 
duction— a  system  which,  owing  to  its  tremendous 
economic  efficiency,  is  not  likely  to  be  given  up<, 
although  many  think,  perhaps  rightly,  that  this 
is  more  than  counterbalanced  by  certain  disad- 
vantages. In  primitive  society  the  individual  could 
get  access  to  the  land,  and  with  his  own  hands 
make  his  weapons,  tools,  and  implements,  his 
economic  independence  being  secured  by  tribal 
custom.  The  so-called  "  communism  "  of  primi- 
tive and  savage  man,  as  well  as  that  of  the  mark, 
the  mir,  and  the  village  community,  was  really 
a  mode  of  property-holding  which  secured  to  the 
individual  access  to  the  means  of  production.  But 
war  and  conquest,  and  in  later  times  the  growth 
of  commerce  and  of  the  division  of  labour,  with 
the  resulting  complexity  of  social  and  economic 
life,  conspired  to  break  down  these  just  primitive 
social  arrangements  and  deprive  the  vast  majority 
of  mankind  of  their  economic  independence.  This 
independence,  it  is  beginning  to  be  recognized, 
must  be  recovered.  Man  has  up  till  now  been 
swept  along  helplessly  by  the  forces  of  social 
evolution.  Now  he  begins  to  understand  them, 
and  to  see  how  he  can  guide  evolution  and  control 
his  destinies.  The  people  are  going  to  secure 
on  a  higher  plane  that  economic  independence  of 
which  they   have    so    long   been   deprived. 

126 


Ownership  of  Means  of  Production 

Modern  economic  life  has  in  the  course  of 
evolution  arrived  at  the  stage  when  production  is 
to  a  certain  extent  socialized.  That  is  to  say, 
just  as  in  the  factory  or  the  workshop  the  workers 
are  organized  in  co-operative  fashion  for  the  pro- 
duction of  wealth,  which,  however,  is  only  in  part 
for  them,  the  whole  of  the  civilized  world  is  one 
huge  co-operative  concern,  wholly  devoted  on  its 
economic  side  to  the  production  of  wealth  on  the 
basis  of  division  of  labour  and  interchange  of 
commodities.  In  other  words,  all  parts  of  the 
world,  all  sections  of  workers,  are  interdependent. 
This  world-wide  economic  system,  however,  so  mar- 
vellously effective  in  wealth  production,  despite  the 
great  waste  due  to  its  management  on  individualist 
and  competitive  lines,  is  not  run,  any  more  than 
the  individual  factory,  for  the  benefit  of  the  people 
who  do  the  work,  but  primarily  for  those  who 
own  the  means  of  production,  the  capitalist  classes. 
The  collectivist  principle  operative  in  the  produc- 
tion and  transport  of  wealth  must  now  be  extended 
to  the  ownership  and  division  of  wealth  for  the 
purpose  of  economy  and  of  justice  between  man 
and  man.  Accordingly,  the  means  of  production 
can  no  longer  be  allowed  to  remain  private 
property,  but  must  be  publicly  owned  and  used 
for  thie  production  of  wealth  for  the  workers  only 
and  for  those  unable  to  work.  All  must  have 
the  right  to  work  and  the  right  to  just  remuner- 
ation, those  who  are  unable  to  work  having  the 
right  of  maintenance.  Able-bodied  persons  must 
not  have,  as  at  present,  the  opportunity  of  living 

127 


Economic  Moralism 

on  "  unearned  income,"  such  as  rent,  interest,  or 
profit,  but  must  work  for  their  livelihood.  More- 
over, unjust  inequality  in  remuneration  of  labour 
must  be  abolished. 

The  means  of  production  may  be  defined  as 
all  capital  or  material  wealth  used  for  the  pro- 
duction of  further  wealth  for  exchange,  and  all 
land  that  can  be  similarly  Used.  The  term  "  land  " 
includes  mines,  quarries,  water  power,  and  every 
other  natural  agent  and  object,  although  some  land, 
such  as  that  for  dwelling-houses  and  gardens,  as 
will  be  shown  later,  might  under  certain  conditions 
be  handed  over  to  individuals  for  their  exclusive 
use  during  a  fixed  period  or  for  life,  or  even  to 
be  bequeathed  to  those  who  have  been  associated 
with  them  in  joint  ownership  or  enjoyment.  The 
term  "  industrial  capital  "  in  its  ordinary  acceptation 
defines  with  sufficient  precision  the  kind  of  capital 
which   must   be   held   as    public    property. 

Whatever  may  be  the  mode  of  holding  and 
managing  public  property,  it  must  be  such  as  will 
preclude  the  extraction  of  rent,  interest,  and  profit 
on  any  pretext  whatever.  All  capital  would  be 
the  inalienable  property  of  the  nation,  each  genera- 
tion maintaining  it  in  efficiency  and  handing  it  on 
to  the  succeeding  generation  unimpaired.  It  would 
be  held  as  a  public  trust,  an  essential  condition 
being  that  no  one  must  be  taxed  in  any  way  for  the 
maintenance  of  capital  that  does  not  minister  to 
his  wants.  Every  person,  however,  must  contribute 
in  the  price  he  pays  for  goods  and  services  suffi- 
cient to  replace  the  capital  expended  in  their  pro- 

128 


Ownership  of  Means  of  Production 

duction,  and  to  increase  it  in  case  of  a  legitimate 
growing  demand. 

The  object  of  collective  ownership  and  manage- 
ment is  to  supply  effectively  and  equitably  the 
material  wants  of  all  the  people.  Capitalism  has 
failed,  ana  by  its  nature  must  fail,  to  do  this. 
The  whole  machinery  of  production  must  be  used 
economically  and  efficiently  for  this  purpose.  This 
implies,  as  has  already  been  said,  work  and  cor- 
responding wealth  for  every  able-bodied  person. 
The  demand  of  the  individual  for  wealth  will 
necessarily  be  limited  by  his  possible  income  as 
producer  or  pensioner,  and  this  income  will  increase 
directly  in  proportion  to  the  progress  of  indus- 
trial efficiency.  But  within  these  limits  his  demand 
will  be  effective.  Wants  will  determine  the  work, 
and  the  more  wants  the  more  work.  The  common 
complaint  that  there  is  not  work  enough  to  go 
round  would  be  obviously  ridiculous  in  an 
economic  system  so  organized.  But  the  amount 
of  work  to  be  done  by  any  person  will  be  in 
proportion  to  that  person's  wants  and  not  to  those 
of  others.  Statistical  information  of  the  wants 
of  the  people  will  have  to  be  obtained.  In  the 
capitalist  system  there  is  no  organized  collection 
of  such  statistics.  Producers  continue  producing 
at  their  usual  rate,  or  regulate  production  according 
to  prices,  or  wait  till  orders  come  in  from  the 
merchants,  who,  again,  are  moved  to  give  them  as 
their  stocks  are  depleted  or  as  the-,  prospects  of 
demand  seem  roseate.  Miscalculations  as  to 
demand    are   consequently   made,    which    result    in 

129  I 


Economic   Moralism 

over-production  or  under-production,  and  miscalcu- 
lation is  easy,  because  each  producer  is  ignorant, 
not  only  of  the  actual  demand,  but  of  the  operations 
of  other  producers,  the  result  of  course  being 
feverish  activity  over  a  whole  industry  when  a 
demand  is  felt,  followed  by  a  glut  in  the  market 
and  unemployment.  Without  accurate  statistics  of 
demand,  producers  work  in  the  dark,  and  pro- 
duction is  not  kept  commensurate  with  demand. 
Moreover,  owing  to  the  influx  of  capital  into  any 
industry  that  gives  signs  of  improvement,  the  means 
of  production  in  that  industry  are  frequently 
increased  until  they  far  exceed  the  normal  require- 
ment. This  is  wasteful,  and  tends  to  impoverish 
the  community. 

Statistics  of  demand  being  absolutely  necessary, 
a  system  of  collecting  them  would  be  an  essential 
feature  of  a  society  with  a  rational  economic 
organization.  Such  a  system  in  a  crude  form 
was  one  of  the  most  remarkable  institutions  of 
the  Peruvian  civilization  under  the  Incas.  At  the 
present  time  the  retailers  in  any  given  district 
could  without  much  trouble  provide  figures  which 
would  show  the  average  consumption  of  the  district. 
In  the  future  there  would  be  an  effective  organiza- 
tion for  supplying  the  figures  necessary  for  the 
maintenance  of  the  equilibrium  of  supply  and 
demand.  Local  distributive  stores  would  be 
established  in  every  district,  and  these  would  be 
in  touch  directly  or  indirectly  with  the  central 
offices  of  the  various  productive  guilds,  such  guilds 
covering    the   whole    field    of    industry.      The    dis- 

130 


Ownership  of  Means  of  Production 

tributive  stores  would  in  this  way  supply  the  orders 
to  the  productive  centres.  There  the  experienced 
officials  would  be  able  from  these  returns  to  fore- 
cast the  demand  of  the  country,  and  thus  keep  the 
wheels  of  production  duly  in  motion.  What  was  to 
be  produced  would  be  decided  by  the  consumers, 
as  indicated  by  their  .demands,  and  not  by  the 
officials,  who  would  merely  set  the  machinery  in 
motion  for  the  satisfaction  of  the  wants  of  the 
public.  Not  only  would  the  general  taste  be  con- 
sidered, but  individual  consumers  would  be  entitled 
to  give  special  orders  and  have  these  executed  at 
cost  prices.  The  central  offices  of  the  guilds 
would  perform  such  work  as  is  now  done  to  a 
certain  extent  in  the  co-operative  movement  by 
the  Co-operative  Wholesale  Societies,  and  would 
do  efficiently  and  economically  what  is  done  in- 
effectively by  the  whole  class  of  wholesale  mer- 
chants in  the  present  system.  They  would  deal 
with  the  demands  from  the  different  districts 
separately  when  giving  the  orders  for  supplying 
them,  and  would  give  them  to  the  places  of  pro- 
duction nearest  these  districts.  Population  would 
be  distributed  more  than  at  present  according  to 
the  productive  capacity  of  the  various  districts. 
Towns  and  cities  kept  up  largely  by  the  idle  rich 
at  present  would  lose  population,  which  would 
cluster  round  the  spots  where  production  could 
be  carried  on  most  economically.  Districts  in 
which  raw  materials  are  obtained  would  not  be 
reduced  in  population  so  long  as  the  raw  materials 
could  be  got  most  cheaply  there,  but  some  manu- 
al 


Economic   Moralism 

facturing  districts  might  in  the  transition  period 
suffer  a  great  change  in  number  of  population,  as, 
owing  to  anomalies  inherent  in  the  present  indi- 
vidualist system,  they  may  be  situated  in  a  geo- 
graphical position  economically  unjustifiable,  and 
even  under  the  ideal  system  changes  would  some- 
times have  to  be  made.  As  every  local  community 
would  owe  its  existence  to  the  national  demand  for 
commodities  which  it  was  specially  fitted  to  pro- 
duce, all  property  in  such  a  locality  owned  by  the 
community  in  its  corporate  capacity  and  by  indi- 
viduals in  their  private  capacity  would  have  to  be 
considered  as  an  investment  encouraged  by  the 
consumers  of  the  commodities  produced  there,  and 
consequently,  if  it  were  discovered  that  the  same 
commodities  could  be  produced  more  cheaply  else- 
where, the  question  of  "  scrapping  "  all  that  capital 
and  conveying  the  population  to  a  new  centre 
would  be  complicated,  not  only  by  the  loss  to  the 
community  of  the  property  owned  by  it  in  its 
corporate  capacity,  but  by  the  necessity  of  giving 
compensation,  at  the  expense  of  the  consumers 
of  its  products,  to  private  individuals  for  the  loss 
of  immovable  property  for  personal  use  and  enjoy- 
ment in  that  district. 

Each  trade  or  industrial  calling  would  have  a 
central  office  of  its  guild  or  union  which  would 
connect  the  local  branches  of  the  guild.  Each 
guild  in  actual  practice  would  hold  in  trust  for 
the  consumers  all  the  capital  required  in  its 
industry,  but  it  would  be  under  national  control, 
powers  being  delegated  by  Parliament  to  the  guilds. 

132 


Ownership  of  Means  of  Production 

Therefore  the  means  of  production  in  any  district 
would  not  be  singled  out  and  treated  as  the  property 
of  that  district — that  is  to  say,  differentiated 
as  municipal  and  national.  For  effective  organiza- 
tion in  production,  each  industry  would  be 
organized  by  itself  for  the  whole  country  as  a 
guild  with  control  of  the  capital  (public  property) 
required  for  the  production  of  its  commodity.  It 
would  undertake  to  supply  the  demand  for  that 
commodity  anywhere,  and  would  aim  at  economy 
in  production.  If  the  commodity  could  be  produced 
more  cheaply  on  a  large  scale  for  a  large  district 
than  in  each  locality  within  such  district,  this  would 
be  done.  Prices  charged  consumers  would  be 
the  same  everywhere.  The  carriage  of  raw 
materials  or  manufactured  goods  into  any  locality 
being  charged  against  the  various  kinds  of  goods 
exported  from  the  locality  (the  main  problem  of 
economic  rent  being  thus  solved),1  and  the  prin- 
ciple of  remuneration  2  being  the  same  everywhere, 
every  locality  would  be  equally  favourable  for 
consumers. 

Let  us  take  a  few  illustrations  of  the  way  in 
which  the  guilds  would  supply  the  wants  of  the 
community.  These  are  given  only  by  way  of  sug- 
gestion, for  all  such  questions  require  much  thought 
and  discussion,  and  they  have  as  yet  received  practi- 
cally no  attention  at  all.  The  proposals  are 
advanced  here  tentatively  and  without  pretension. 
Dogmatism  on  such  subjects  is  ridiculous.  In  due 
time  the  proper  system,  firmly  based  on  ethics 
1  Chapter  VII.  2  Chapter  IX. 

133 


Economic  Moralism 

and  economics,  will  be  evolved  as  the  result  of 
suggestion,  discussion,  and  the  logic  of  events. 

The  guilds  would  be  very  numerous,  and  as  has 
been  explained,  each  would  be  organized  nation- 
ally for  several  reasons — for  instance,  for  the  pur- 
pose of  coping  with  exceptional  demands  in 
localities,  and  for  the  purpose  of  comparison  of 
conditions  and  remuneration  of  labour,  as  well 
as  for  ensuring  equality  of  service  to  consumers. 

To  illustrate  these  principles,  it  would  be  well 
to  consider  one  of  these  guilds  in  slight  detail. 
Let  us  consider  the  economic  machinery  that  would 
have  to  be  set  in  motion  in  connection  with  the 
production  of  wheat  from  the  time  the  demand 
for  it  is  made  to  the  time  it  is  idelivered  raw  or 
prepared  for  consumption.  The  consumers  would 
order  their  supplies  in  the  form  of  breadstuffs, 
flour,  wheat  for  seed,  poultry,  etc.,  from  the  dis- 
tributive stores,  whose  business  it  would  be  to 
forecast  by  the  aid  of  experience  and  statistical 
data  the  wants  of  their  respective  districts.  Each 
store  would  be  in  touch  with  one  or  more  productive 
guilds.  The  bakers'  store,  for  example,  or  the 
bakers'  department  of  the  general  store,  would 
instruct  the  local  branch  of  the  bakers'  guild 
regarding  the  supplies  required.  This  branch 
would  produce  the  articles,  and  in  its  turn  would 
keep  itself  supplied  with  the  materials  necessary 
for  production,  such  as  flour,  fruit,  salt,  sugar,  etc. 
It  would,  either  directly  or  through  a  central  office, 
order  the  flour  from  the  mills  nearest  it,  where  it 
would    always   get    its    supplies,    statistical    returns 

134 


Ownership  of  Means  of  Production 

firom  the  mills  being  sent  periodically  to  the  head- 
quarters of  the  guild.  The  mill  would  order  the 
various  kinds  of  wheat  required  for  milling  from 
the  central  office  of  the  millers'  guild,  which  again 
would  order  them  from  the  central  farmers'  guild. 
The  latter  would  also  receive  through  other 
channels  the  orders  for  seed  wheat,  etc.  It  would 
get  as  much  produced  in  the  country  as  possible 
with  economic  advantage,  and  would  order  the 
remainder  from  abroad.  The  farmers'  guild  would 
thus  have  to  deliver  the  required  quota  of  wheat  to 
the  various  mills  and  distributive  stores,  and  would 
arrange  for  production  so  as  to  save  carriage  as 
much  as  possible.  Of  course  other  agricultural 
products  would  be  required,  and  the  guild  would 
aim  at  producing  nearest  the  place  of  consumption 
the  most  perishable  kinds  of  produce  and  such  as 
were  least  easy  to  transport,  to  the  exclusion  of 
other  kinds  if  necessary. 

As  regards  prices,  the  farmers'  guild  would  have 
to  strike  the  average  price  of  home-grown  wheat. 
The  necessary  time  expended  on  each  kind  of 
crop  on  each  farm,  plus  the  time  cost  of  seed, 
of  the  depreciation  of  buildings  and  implements, 
as  well  as  the  carriage  on  goods  for  the  farms, 
would  be  placed  against  the  products  in  proper 
proportion.  The  average  price  of  wheat  would 
be  affected  by  the  price  of  the  foreign-grown  wheat 
bought  for  mixing  and  to  supplement  the  home- 
grown. This  average  price  would  be  charged 
everywhere,  the  reason  for  which  will  be  adduced 
in   the   chapter   on   the    Equitable   Distribution   of 

135 


Economic  Moralism 

Economic  Rent.  Similarly  with  the  price  of  flour 
— the  cost  of  the  wheat,  the  labour  and  other 
expenses  of  milling  in  all  parts  of  the  country 
would  be  ascertained  and  a  uniform  price  struck. 

But  another  factor  must  also  be  taken  into 
account.  A  densely  populated  district,  densely 
populated  because  favourably  situated  for  produc- 
tion, is  able  to  economize  in  many  ways  owing 
to  the  very  density  of  its  population,  a  mill  Ol- 
factory on  a  large  scale  for  the  supply  of  local 
wants  being  more  economical  than  one  on  the 
small  scale  necessary  in  a  sparsely  populated 
district.  This  is  also  productive  of  a  form  of 
economic  rent.  In  strict  justice  the  disadvantages 
in  the  latter  case  should  be  borne  by  the  consumers 
of  the  product  or  products  which  the  smaller 
community  has  been  directed  to  produce,  and  the 
advantage  in  the  former  case  should  be  shared 
by  the  consumers  of  the  larger  community's 
products.  Therefore,  although  an  average  be 
struck  for  the  whole  country  and  that  price  be 
charged  everywhere,  the  difference  between  the 
actual  cost  and  the  average  should  be  credited 
the  said  consumers  through  the  productive  guilds 
in  the  former  case  and  debited  them  in  the  latter. 
This  does  not  involve  much  extra  accounting,  for 
in  any  case  the  actual  cost  of  production  in  every 
district  and  factory  would  have  to  be  ascertained 
before  an  average  could  be  struck. 

Now  consider  a  problem  of  a  somewhat  different 
kind — say  the  incidence  of  water  rates.  The  cost 
of   collection    of    the    water,    whether    in    wells    or 

136 


Ownership  of  Means  of  Production 

reservoirs,  must  be  borne  by  the  consumers  at  the 
average  cost  at  the  places  of  collection.  But  the 
water  supply  for  a  district  or  a  number  of  districts 
might  have  to  be  brought  from  a  great  distance 
and  at  great  expense.  The  difficulty  of  getting 
water  might  be  one  of  the  disadvantages  of  any 
community,  especially  established  in  a  certain 
locality,  as  all  communities  would  be,  for  the 
purpose  of  producing  a  commodity  or  commodities 
required  by  a  section  of  the  nation.  Therefore,  the 
expense  of  conveying  the  water  (as  also  all  other 
articles)  ought  to  be  borne  by  the  consumers  of 
such  commodity  or  commodities,  since  it  is  for  their 
benefit  the  community  is  settled  in  the  locality.1 
The  carrying  out  of  the  water  scheme,  however, 
would  not  be  left  to  the  local  community,  which 
might  be  careless  of  expense,  since  the  cost  would 
be  borne  by  the  consumers  of  the  exports  of  that 
community.  It  would  be  left  to  the  engineering 
experts,  and  with  their  experience  and  scientific 
knowledge  they  would  as  independent  parties 
arrange  for  the  delivery  of  the  required  quantity 
of  water  in  the  most  economical  way  possible. 
They  would  have  no  temptation,  like  engineers  and 
contractors  in  the  present  individualist  system,  to 
make  work  for  themselves  and  exploit  the  public. 
By  the  exercise  of  foresight  all  such  work  could 
be  so  arranged  as  to  give  steady  employment  to 
a  regular  staff.  But  in  case  of  an  interval  of 
unemployment  between  two  such  undertakings,  a 
sufficient  extra  charge  would  be  made  for  every 
1  Chapter  VII. 
137 


Economic   Moralism 

undertaking,  for  the  purpose  of  forming  a  fund 
for  the  payment  of  such  of  the  staff  as  could 
not  be  drafted  immediately  into  a  cognate  industry. 
If  the  waterworks  supplied  two  or  more  local- 
ities, the  cost  would  be  shared.  The  delivery  of 
the  water  to  consumers — that  is,  the  cost  of  pipes 
within  houses — would  be  borne  by  the  consumer, 
for  such  expense  would  depend  on  the  size  and 
arrangement  of  the  house,  which  again  would 
depend  on  the  whim  of  the  individual.  A  per- 
manent staff  of  men  would  be  required  to  maintain 
the  waterworks  and  the  pipes  in  good  order,  and 
would  be  employed  by  the  productive  guild 
concerned,  a  section  of  the  engineers'  guild. 

Take  now  the  case  of  the  tramways.  Here 
again  the  cost  of  materials  and  labour,  which 
would  be  supplied  by  the  proper  branch  of  the 
engineers'  guild,  would  be  the  same  everywhere. 
The  carriage  of  material  for  construction  imported 
into  the  district  would  be  placed  on  the  exports,1 
but  all  the  cost  of  laying  and  building  and 
of  running  the  tramways  would  have  to  be  borne 
by  the  users  and  by  them  alone.  If,  however, 
owing  to  the  nature  of  the  ground,  it  is  anywhere 
more  expensive  than  usual  to  lay  down  tramways 
or  to  work  them,  the  extra  expense  should  be 
put  on  the  exports,  for,  as  we  have  seen,  the  dis- 
advantages of  a  district  must  be  borne  by  those 
for  whose  benefit  the  community  is  settled  there. 
Similarly   with   lighting   and    local    roads. 

With    regard    to    railways,    the   users,    and    they 
1  Chapter  VII. 
138 


Ownership  of  Means  of  Production 

alone,  must  maintain  the  capital.  The  railways 
would  have  to  be  managed  by  a  special  guild. 
But  who  would  decide  that  a  new  line  should  be 
laid  down,  and  who  would  provide  the  funds? 
The  question  of  the  maintenance  and  renewal  of 
capital  will  be  fully  dealt  with  in  a  later  chapter,1 
but  let  us  glance  at  the  other  part  of  the  question 
here.  Those  who  are  interested  ought  to  decide 
and  provide  the  funds.  But  those  interested  are 
the  consumers  of  the  exports  of  the  district  to 
be  served,  for,  as  said,  all  carriage  of  imports 
into  any  locality  must  be  placed  on  the  cost  of  the 
exports.2  These  consumers,  however,  would  be 
scattered  over  the  country  and  would  have  no 
natural  cohesion.  Accordingly,  their  interests 
would  have  to  be  safeguarded  by,  say,  the 
transport  guild,  which  would  have  full  informa- 
tion regarding  the  natural  resources  of  the 
country,  each  district  being  under  the  eye  of  its  own 
officials.  The  means  of  transport  would  as  a  matter 
of  course  be  periodically  surveyed  with  a  view 
to  economies  and  improvements.  Full  data  would 
be  procurable  to  enable  the  experts  to  come  to 
a  satisfactory  decision,  and  this  would  prevent  the 
construction  of  unnecessary  railways,  which  fre- 
quently happens  under  the  speculative  and  competi- 
tive capitalist  system.  Suppose  a  railway  to  be 
proposed  for  a  district  served  only  by  a  road 
and  a  river  or  a  canal.  As  no  one  would  lose 
through  the  competition  of  the  new  method  of 
conveyance,  as  no  vested  interest  would  stand  in 
1  Chapter  VI.  2  Chapter  VII. 

139 


Economic   Moralism 

the  way,  no  one  would  be  interested  in  withholding 
information  or  misleading  the  promoters.  Neither 
would  any  one  have  any  pecuniary  interest  to  serve 
in  having  the  railway  constructed.  The  two 
systems  would  be  considered  impartially  on  their 
merits.  All  that  would  be  required  would  be  a 
calculation  of  the  comparative  cost.  If  there  were 
no  natural  advantage  that  could  only  be  exploited 
by  a  railway,  if  therefore  no  increase  in  the  volume 
of  goods  or  passengers  could  be  expected,  except 
such  as  would  result  from  cheaper  transport,  the 
cost  of  carriage  by  the  old  system,  which  would 
be  accurately  known,  say,  cost  of  maintenance  of 
roads,  horses,  carts,  motors,  barges,  and  cost  of 
labour,  would  be  set  against  the  estimate  of  the 
cost  of  running  the  railway,  maintenance  of  same, 
and  repayment  of  loan  capital,  plus  the  expense 
of  the  old  system  in  so  far  as  it  was  still  used. 
If  the  railway  were  likely  to  be  a  more  expensive 
means  of  carriage  than  the  old  system,  it  would 
be  an  unjustifiable  luxury. 

We  have  indicated  that  every  kind  of  productive 
capital  must  be  raised  from  and  maintained  by 
the  consumers  of  the  commodities  produced  by  it. 
It  is  to  be  managed  and  worked  by  guilds  of 
experts,  each  guild  holding  its  necessary  productive 
capital  in  trust  for  the  consumers  of  its  products. 
But  these  guilds  would  have  to  be  controlled  by 
Parliament,  which  would  also  have  to  sanction  new 
undertakings  or  extensions,  and  their  actions 
closely  watched  in  the  interest  of  the  public  by 
local  elective  public  bodies   in  touch  with   Parlia- 

140 


Ownership  of  Means  of  Production 

ment.  The  principal  work  of  Parliament  would 
be  legislation  for  the  regulation  of  the  industrial 
arrangements  of  the  country,  and  this  work  would 
be  a  simple  task  in  comparison  with  the  work 
of  Parliament  now.  Parliamentary  work  at 
present  consists  largely  of  attempts  to  patch  up 
a  working  agreement  between  the  necessarily 
antagonistic  forces  of  capital  and  labour.  It 
consists  of  attempts,  always  abortive,  and  therefore 
continually  to  be  renewed,  to  deal  with  problems 
of  poverty  and  pauperism,  with  the  conditions  of 
labour  in  field,  factory,  and  workshop,  against 
the  pecuniary  interest  of  the  capitalists.  When 
the  privileges  of  capital  are  abolished  for  ever, 
when  all  capital  is  held  in  trust  for  the  common 
good,  and  there  is  but  one  class  in  the  community, 
the  main  work  of  Parliament  will  be  to  lay  down, 
for  the  guidance  of  the  various  guilds  of  experts, 
the  particular  applications  of  the  recognized  prin- 
ciples of  industrial  and  general  economic  life.  It 
will  also  be  the  final  court  of  appeal  for  disputes 
between  such  guilds  and  the  general  public,  and 
between  individuals  and  any  public  body,  guild, 
or  trust.  The  guilds  will  be  departments  of  the 
Government  service,  and  their  by-laws  will  have 
to  be  in  accordance  with  the  legislative  measures 
affecting  them.  They  will  not  have  arbitrary 
powers,  any  more  than  the  postal  department  or 
guild   has   now. 

Parliament  and  the  local  councils,  through  which 
the  voice  of  public  opinion  will  make  itself  heard, 
will  be  valuable,  not  only  in  supervising  the  remun- 

141 


Economic   Moralism 

eration  and  conditions  of  labour,  but  in  ensuring 
efficiency.  Consumers  under  Capitalism  have  but 
little  control  over  the  quality  and  cost  of  goods 
or  services.  They  may  complain,  and  may  get 
redress  or  may  not.  The  eomplainer  may  deal 
with  another  supplier,  with  perhaps  no  better 
result.  He  possesses  no  other  control.  He  must 
either  persuade  or  frighten  his  supplier  into 
providing  what  he  wants  at  what  seems  a  reason- 
able price.  And  owing  to  the  increase  of  combina- 
tions and  trusts  this  becomes  yearly  more  difficult. 
Under  the  new  system  it  would  be  useless  to 
threaten  to  go  elsewhere.  Therefore,  if  the 
individual  could  not  get  his  complaint  attended 
to  by  applying  to  the  local  distributive  guild,  he 
would  have  to  be  placed  in  a  position  to  appeal 
to  a  higher  authority  and  an  impartial  one.  The 
higher  officials  of  the  guild  might  be  appealed  to 
first,  and  if  there  should  be  no  redress,  appeal 
could  be  made  to  the  local  town  or  county  council, 
whose  principal  function  would  be  to  deal  with 
such  disputes.  If  necessary  the  local  council,  or 
the  individual  himself,  would  carry  the  case  to  the 
law-courts,  and  in  the  last  instance  the  Legislature 
might  see  fit  to  institute  legislation  to  determine 
the  respective  rights  of  guilds  and  public.  The 
same  course  might  be  taken  by  the  members  of 
any  guild  against  the  regulations  of  the  guild. 
The  guild  regulations  themselves  would  be  such 
as  to  discourage  inefficiency.  If  one  factory's 
products  should  cost  more  to  produce  than 
another's,    it    would    be    due   either   to    antiquated 

142 


Ownership   of  Means  of  Production 

machinery  or  methods,  or  to  inefficient  labour. 
Be  it  noted,  however,  in  passing,  that  this  cost 
would  not  be  put  on  the  goods  actually  produced 
by  that  factory,  because  one  price  for  the  article 
would  be  charged  everywhere — it  would  merely 
tend  to  keep  the  price  high  over  the  whole  field. 
If  the  machinery  were  at  fault,  this  might  be 
tolerated  because  according  to  calculation  it  might 
be  more  economical  to  wear  out  the  machinery 
than  to  scrap  it.  If,  on  the  other  hand,  the 
methods  were  unsatisfactory,  a  new  manager  or 
new  foreman  could  be  drafted  in  from  a  better 
managed  factory.  If  the  workers  were  slower  than 
others  elsewhere,  unless  this  were  due  to  climatic 
or  other  unavoidable  local  conditions,  such  workers 
themselves  must  suffer  for  such  a  fault,  and  be 
paid  for  the  work  done  at  the  average  cost,  and 
not  for  the  time  expended  upon  it.1  Again,  if 
the  articles  were  of  inferior  quality,  they  would 
have  to  be  sold  at  the  price  they  would  bring,  and 
the  producers  would  again  be  made  to  suffer.  If 
the  goods  could  be  sold  with  difficulty  or  not  at 
any  price,  the  producers  would  have  to  be  the 
sole  losers,  and  if  they  could  not  improve,  would 
have  to  be  put  to  work'  better  suited  to  their 
capability.  The  central  office  of  each  guild  would 
have  to  compare  the  returns  of  the  separate  work- 
shops and  factories  with  each  other,  and  not  only 
encourage  emulation,  but  punish  defaulters  by 
giving   them    reduced    remuneration. 

There   would   be   no   occasion  for  apprehension 
1  Chapter  IX. 
143 


Economic  Moralism 

of  supplies  running  short.  One  year's  supply 
would  vary  little  from  that  of  another,  and  the 
control  would  be  practically  automatic.  When 
production  is  adjusted  to  the  needs  of  the 
community,  its  rate  will  be  very  regular,  year  in, 
year  out.  Fluctuations  in  fashion  will  be  little 
known,  changes  in  fashion  arising  for  the  most 
part  only  in  a  society  with  strong  class  demarca- 
tions, in  which  the  privileged  or  upper  classes 
always  flee  from  the  adulatory  imitation  of  their 
dress  and  habits  by  the  lower  classes.  In  a 
system  of  economic  equality  this  would  disappear. 
Besides,  the  fact  of  all  being  economically  in  the 
same  class  would  cause  a  steadiness  of  demand. 
Agricultural  and  horticultural  production  being 
dependent  on  weather  conditions  and  being 
accordingly  uncertain  in  result,  a  margin  would 
have  to  be  allowed  to  meet  shortage  due  to  bad 
seasons.  On  the  whole  there  would  be  far  less 
danger  of  scarcity  of  any  article  than  in  the  present 
system  with  its   want  of  co-ordination. 


144 


CHAPTER    V 

PRIVATE   PROPERTY 

Under  an  economic  system  based  on  Absolute 
Ethics  every  able-bodied  person  will  receive  an 
income  for  the  work  he  or  she  is  engaged  to  do 
for  society,  and  every  one  will  have  the  right 
and  the  opportunity  to  work.  Those  also  who  are 
wholly  or  partially  incapacitated  for  work,  by 
disease,  or  accident,  or  old  age,  will  receive  an 
equitable  allowance  from  society.1  The  net  social 
income  will  thus  be  dealt  out  to  individuals  to  be 
spent.  Charges  for  industrial  purposes,  such  as 
for  renewal  of  capital  or  depreciation,2  will  be 
made  by  addition  to  prices,  and  taxes  for  public 
purposes  will  be  levied  from  individuals. 3  But 
after  all  deductions  have  been  made,  the  individual 
will  have  a  very  large  amount  of  purchasing  power 
placed  at  his  disposal.  With  that  he  will  have 
to  satisfy  all  his  personal  wants,  except  those 
already  satisfied  wholly  or  partially  by  the 
necessary  free  public  services. 3  He  will  be  at 
liberty  to  spend  his  income  in  what  proportion 
he  pleases  on  food,  clothing,  housing,  furniture, 
books,  amusements,  travel,  and  anything  else.     And 

1  Chapter  X.  2  Chapter  VI.  3  Chapter  XI. 

145  K 


Economic   Moralism 

he  will  be  entitled  to  spend  it  at  once  or  to  save 
it  for  future  use.  Accordingly,  private  property 
will  hold  a  very  strong  position  in  the  future,  and 
will  in  ample  measure  be  within  the  reach  of  every 
one,  instead  of,  as  now,  only  within  the  reach  of 
the  few.  The  individual  will  hold  strict  proprietary 
rights,  in  so  far  as  he  does  not  share  them  volun- 
tarily and  by  contract  with  others,  in  his  house 
or  houses,  his  furniture,  garden,  vehicles,  animals, 
implements  and  tools  for  utility  or  pleasure.  Full 
liberty  will  be  accorded  him  to  be  as  narrowly 
individualistic  as  he  pleases  with  his  own  property, 
or  to  satisfy  his  social  instincts  by  having 
community  of  property  with  such  of  his  fellow- 
citizens  as  he  chooses. 

The  right  of  sale  will  necessarily  appertain  to 
every  proprietor,  and  to  this  no  objection  can  be 
raised.  People  will  undoubtedly  desire  to  sell 
property  they  no  longer  wish  to  possess,  and  it 
would  be  unreasonable  to  put  obstacles  in  the  way. 
It  would  be  bad  economy  to  prevent  the  transfer 
of  property  from  the  person  who  no  longer  wants 
it  to  one  who  can  make  use  of  it.  The  only 
difficulty  lies  in  determining  the  fair  price  and 
having  the  exchange  effected  on  that  basis.  It 
would  be  quite  impossible  to  prevent  private 
bargaining  and  selling.  Mistakes  might  be  made 
as  to  the  real  value,  but  such  transactions  would  be 
between  a  willing  buyer  and  a  willing  seller,  and, 
as  is  seldom  the  case  at  present,  these  would  be 
economic  equals.  There  would  be  little  likelihood 
of   a   higher   price    being    got   for   an   article   than 

146 


Private  Property 

the  original  price,  because  the  buyer  would  be 
able  to  buy  from  the  distributive  store  at  the 
original  price,  unless,  of  course,  the  cost  of  pro- 
duction had  increased — and  in  view  of  progress 
in  seien'  e  and  the  arts,  an  increase  would  be  less 
likely  than  a  decrease.  Objects  of  art  and  rare 
articles  might  command  a  monopoly  price,  but 
if  the  owner  happened  to  prize  them  very  much, 
he  would  require  adequate  compensation  for  the 
loss  of  them,  and  the  determination  of  this  might 
safely  be  left  to  those  immediately  concerned.  The 
ridiculously  high  prices  obtainable  at  present  for 
pictures  and  articles  of  vertu  are  due  to  competition 
between  the  very  rich,  owing  to  these  providing 
a  means  of  gratifying  their  desire  for  ostentation. 
On  the  other  hand,  most  sales  of  second-hand 
property  might  be  made  at  lower  prices  than  the 
real  value  if  there  were  no  facilities  for  sale. 
To  obviate  this  injustice,  the  distributive  store 
might  institute  a  department  for  the  advertisement 
or   exhibition   and   sale  of  such  property. 

But  the  question  of  private  property  stands  in 
close  relation  with  another  and  more  important 
one,  namely,  that  of  the  liberty  to  be  accorded 
individuals  of  conducting  industrial  and  commer- 
cial undertakings  independent  of  State  management 
and  control.  In  the  first  place,  ought  the  State  to 
protect  itself  by  instituting  a  monopoly  in  all  its 
industrial  and  commercial  undertakings?  Secondly, 
ought  the  State  to  prohibit  individuals  and  com- 
panies from  entering  into  such  ventures  as  the 
State  fails  or  refuses  to   take  in  hand? 

147 


Economic  Moralism 

If  State  monopoly  is  not  necessary  to  ensure 
substantial  justice  between  man  and  man,  or  to 
render  a  branch  of  industry  or  commerce  an 
economic  success,  it  has  no  justification.  Con- 
sidered in  its  ethical  aspect,  competition  of  private 
enterprise  with  the  State  would  not  be  injurious  to 
the  workers  so  far  as  remuneration  of  labour  is 
concerned,  since  no  one  would  work  in  private 
employment  for  less  than  would  be  paid  by  the 
State.  Strict  moralists  might  find  objection  to 
the  price  charged  consumers,  if  it  were  sufficient 
to  yield  a  profit  to  the  capitalists  concerned. 
Objections  to  profit-making  are  unassailable,  and 
with  a  high  standard  of  morality  profit-making 
would  be  eschewed  by  the  promoters.  In  any 
case,  for  successful  competition  with  the  State, 
lower  prices  would  have  to  be  charged,  or  better 
commodities  produced,  in  order  to  induce  con- 
sumers to  buy.  This  would  be  not  only  a  material 
but  a  moral  advantage  to  the  community,  as  an 
example  would  thus  be  given  to  the  State  depart- 
ment concerned.  If  the  department  or  guild  should 
lag  behind  in  its  activities,  it  would  be  due  to  a 
slackening  of  the  moral  fibre  of  the  staff  of  the 
department,  and  competition  from  without  would 
be  of  public  service,  if  this  were  the  only  way  of 
giving  it  tone.  But  in  principle  every  effort  would 
be  made  by  the  public  representative  bodies  to 
utilize  within  the  appropriate  department  all  the 
energy  and  ability  available,  and  so  preclude  com- 
petition. There  would,  however,  be  very  slight 
likelihood  of  such  competition,  the  principal  draw- 

148 


Private  Property 


back  being  the  lack  of  large  accumulations  of 
capital  in  private  hands,  and  the  consequent 
necessity  of  collecting  capital  in  small  sums  from 
very  numerous  individuals,  which  would  be  a 
difficult  matter,  likely  to  be  attempted,  not  for  profit 
but  solely  under  pressure  of  intolerable  conduct 
on  the  part  of  a  public  productive  or  distributive 
department.  It  is,  however,  improbable  that  a 
public  department  would  not  be  controlled  other- 
wise— say,  by  pressure  of  public  opinion  expressed 
through  local  or  national  legislative  and  adminis- 
trative bodies. 

On  moral  grounds  alone  there  seems  no  good 
reason  to  prohibit  competition  of  private  individuals 
with  the  State.  But  from  the  economic  point  of  view 
it  must  be  looked  at  askance  The  community, 
let  us  suppose,  has  capital  invested  in  a  certain 
department  of  industry.  Owing  to  a  new  invention 
the  same  value  of  new  capital  would  effect  a  great 
saving  of  labour  and  so  cheapen  the  product. 
Clearly,  under  individualism,  the  new  capital  would 
render  the  old  less  profitable,  if  not  quite  useless, 
and  the  new  capital  would  oust  the  old.  All  the 
loss  would  fall  on  one  set  of  capitalists,  although 
ultimately  all  such  loss  is  borne  by  the  capital- 
less  workers,  who  provide  others  with  capital  to 
speculate  or  gamble  with.  But  under  the  system 
advocated  here  the  loss  of  capital  would  be  borne 
by  the  community,  and  therefore  that  loss  must  be 
set  against  the  gain.  In  some  cases  it  might  be 
advisable  to  scrap  the  old  capital  at  once,  and  in 
others  to  use  it  up  in  the  usual  course,  and  intro- 

149 


Economic   Moralism 

duce  the  new  only  when  the  old  had  been  quite 
used  up.  The  problem  would  be  solved  quite 
simply.  It  would  be  a  matter  of  arithmetical 
calculation.  Now,  if  competition  from  without  were 
allowed  in  this  case,  the  private  capitalists  would 
force  the  public  department  concerned  to  scrap 
the  capital  at  once,  causing  manifest  loss  to  society. 
Evidently,  then,  such  competition  could  not  be 
allowed.  There  seems,  therefore,  considerable 
ground  for  upholding  in  practice  the  right  of  the 
State  to  monopoly  in  production  and  distribution. 
But  as  this  monopoly  right  will  be  acquired  in  the 
transition  period  it  will  be  extended  as  found 
convenient  and  justifiable,  on  all  grounds,  even  if 
necessary  to  the  exclusion  of  all  competition.  The 
evolution  will  accordingly  be  gradual  and  natural, 
and  will  be  based  on  experience,  and  there  seems, 
therefore,  less  likelihood  of  a  serious  mistake  being 
made  than  if  a  peremptory  decree  put  a  stop  to  all 
competition  and  placed  the  economic  destinies  of 
the  nation  in  untried  hands.  Individuals  will  cer- 
tainly, during  the  transition  period,  take  up  enter- 
prises that  the  State  fails  or  refuses  to  take  up. 
Further,  there  seems  no  reasonable  objection  to 
such  liberty  being  allowed  in  certain  circumstances 
even  under  the  fully  realized  system.  Permission 
however,  would  have  to  be  got  from  Parliament, 
which  might  order  the  promoters  and  the  public 
department  concerned  to  debate  the  pros  and  cons 
before  a  parliamentary  committee.  If  the  depart- 
ment could  show  no  good  reason  for  refusing  to 
undertake  the  business,   it  would  be  compelled  to 

150 


Private   Property 

undertake  it.  If  it  could  show  no  good  reason 
for  prohibiting  private  individuals  from  taking  it 
up,  powers  would  be  granted  the  latter,  or  they 
would  be  organized  as  a  branch  of  the  public 
service,  if  Parliament  deemed  it  advantageous  to 
the  community.  At  the  same  time,  Parliament 
would  settle  the  terms  on  which  the  State  at  some 
future  date  might  take  over  the  undertaking  if  it 
should  be  on  a  private  basis. 

The  right  of  private  property  involves  the  right 
of  gift  and  bequest.  At  the  present  day  the  right 
of  gift  is  hardly  ever  called  in  question,  but  bequest 
is  limited  to  a  considerable  extent,  and  the  limita- 
tion supported  by  the  most  active  defenders  of 
private  property.  Herbert  Spencer  holds  that  from 
"  an  expediency  point  of  view  "  there  are  strong 
reasons  that  unrestrained  giving  should  not  be 
allowed.  And  as  regards  bequest,  which  is,  as 
he  says,  "  postponed  gift,"  he  justifies  death  duties 
for  revenue  if  politically  expedient  under  existing 
conditions.  He  also  justifies  further  curtailment 
of  the  right  of  bequest  on  the  ground  that  "  as 
bequeathed  personal  property  is  habitually  invested, 
power  to  prescribe  its  uses  without  any  limit  of 
time  may  result  in  its  being  permanently  turned 
to  ends  which,  good  though  they  were  when  it  was 
bequeathed,  have  been  rendered  otherwise  by  social 
changes."  He  says  that  "  an  empirical  compromise 
appears  needful,"  and  that  the  power  of  directing 
property  not  bequeathed  to  children  should  be 
limited. 

I5i 


Economic  Moralism 

All  this  restriction  or  limitation  of  the  right  ofi 
gift  and  bequest  is  encouraged  and  justified  by 
the  present  unjust  economic  system,  and  only  under 
Economic  Moralism  would  the  right  be  relieved  of 
such  limitation.  Under  conditions  of  economic 
equality  it  would  be  unjust  to  interfere  with  the 
disposal  a  person  chooses  to  make  of  his  property. 
But  under  Capitalism  the  distribution  of  wealth 
is  so  obviously  unjust,  that  it  is  admitted  on  all 
sides  that  the  State  should  have  for  revenue 
purposes  a  substantial  share  of  large  estates  at 
the  death  of  the  owners,  although  it  is  doubtful 
whether  the  confiscation  of  capital  at  death  is 
superior  to  the  confiscation  of  income  during  life. 
The  principles  of  taxation  under  Moralism  would 
necessarily  be  totally  different  from  those  at  present 
in  vogue,  and  there  would  certainly  be  no  death 
duties — that  is,  confiscation  of  private  property — 
unless  there  were  no  will  and  no  near  relatives. 
In  the  present  system  there  is  much  to  be  said 
in  favour  of  death  duties,  but  on  large  estates 
alone,  small  estates,  especially  those  bequeathed 
to   near    relatives,   being   most  unjustly   overtaxed. 

The  objection  that  Spencer  raises  against  the 
power  of  the  testator  to  prescribe  for  ever  the 
use  to  which  his  estate  must  be  pat  is  valid  only 
under  Capitalism.  As  he  recognizes,  the  capital 
sum  is  habitually  invested,  and  since  the  rent  or 
interest  accrues  for  ever  and  ever,  the  absurdity  is 
apparent  of  an  individual  dictating  to  subsequent 
generations  the  purpose  to  which  the  result  of  their 
own   labour,    not   his,    is   to    be   put.      Spencer   is 

152 


Private  Property 

obsessed  by  the  capitalist  idea  of  the  principal 
sum  or  capital  being  productive  for  ever  of  rent 
or  interest.  Under  Moralism  every  person  might 
safely  be  allowed  to  direct  the  use  of  all  the  wealth 
he  himself  had  earned,  provided  the  object  were 
lawful.  There  would  only  be  the  principal  to 
spend,  and  it  would  necessarily  be  a  modest  amount 
and  soon  exhausted. 

Similarly  with  Spencer's  objections  to  "  unre- 
strained giving,"  which,  however,  he  short-sightedly 
confines  to  charity  or  almsgiving.  He  overlooks 
the  fact  that  in  a  system  like  the  present,  with  some 
immensely  wealthy  men  and  innumerable  poor  ones, 
it  is  possible  for  the  wealthy  to  corrupt  legislatures, 
administrations,  and  citizens,  in  many  ways  not 
yet  recognized  as  illegitimate.  The  evil  resides, 
not  in  the  right  of  gift,  bat  in  the  unjust  economic 
system  which  renders  possible  such  inequality  of 
wealth. 

As  to  the  ownership  of  dwelling-houses,  indi- 
viduals would  be  allowed  sites  under  certain  con- 
ditions as  to  rent  and  eminent  domain,  on  which 
they  would  be  allowed  to  build  houses  to  suit  their 
needs  and  tastes,  after  the  plans  had  been  approved 
of  by  the  authorities  appointed  to  preserve  the 
amenity  of  the  district.  As  regards  publicly  owned 
houses,  necessary  for  the  nomadic  part  of  the 
population,  these  would  be  let  for  periods  at  a 
rent  that  would  cover  upkeep,  depreciation,  and 
insurance.  But  the  existence  of  such  publicly 
owned    houses    would    depend    on    the    desire    of 

153 


Economic  Moralism 

individual  citizens  to  save  a  part  of  their  income 
for  future  consumption  and  on  the  comparative 
importance  of  other  necessary  public  works  pro- 
jected at  the  same  time.  Buildings  for  industrial 
or  public  purposes  would  be  managed  like  any 
other  form  of  public  capital,  and  a  charge  would 
be  made  only  for  depreciation. 


154 


CHAPTER    VI 

RENEWAL   AND    RAISING   OF   INDUSTRIAL 
CAPITAL 

Any  given  capital  would  be  renewed,  or  main- 
tained, by  the  inclusion  of  a  sufficient  sum  in  the 
price  of  the  commodities  in  the  production  of  which 
it  is  concerned  and  in  L.e  price  of  the  services 
which  it  renders  possible.  It  would  therefore  be 
maintained,  not  by  all  the  citizens  of  the  State  as 
under  Socialism,  but  only  by  those  who  derive 
benefit  from  the  commodities  produced  or  the  ser- 
vices rendered  by  its  aid.  After  capital  had  been 
acquired  as  public  property,  no  charge  would  be 
made  for  interest  on  it.  The  use  of  it  would  be 
free  to  all,  but  each  person  would,  when  buying 
any  article,  pay  enough  to  replace  the  capital  con- 
sumed in  its  production — in  other  words,  to  cover 
depreciation.  Under  Capitalism  the  consumer  pays 
both  for  depreciation  of   capital  and  for  profit. 

In  the  transition  period  the  nationalization  of 
all  enterprises  recognized  at  any  given  time  as 
suitable  for  collective  ownership  and  management 
might  be  effected  by  the  maintenance  of  the  prices 
in  whole  or  in  part  charged  under  private  manage- 
ment, and  utilization  of   the  profit  as  payment  to 

155 


Economic   Moralism 

the  capitalists  for  their  capital,  on  which  of  course 
no  interest  would  accrue.  Thus  10  per  cent, 
profit  per  annum  would  pay  off  the  capital  in  ten 
years,  or  2  per  cent,  in  fifty  years.  When  the 
capital  had  been  paid  for,  prices  would  be  reduced 
to  a  figure  which  would  only  suffice  for  the  upkeep 
of  capital.  The  nationalization  of  capital  is  a 
simple  matter  from  the  moralist's  point  of  view, 
although  it  presents  grave  difficulties  to  the 
practical  politician.  Capital  has  under  Capitalism 
been  almost  entirely  acquired  and  maintained  by 
means  which  call  for  the  sharpest  ethical  condem- 
nation, and  strict  justice  enjoins  the  confiscation 
by  the  State  or  aggregate  of  citizens  of  all  except 
such  as  has  been  saved  by  the  individual  from  his 
morally  legitimate  earnings.  But  if  capital  is  to 
be  paid  for  by  those  who  have  been  robbed  for  so 
long,  it  is  clear  that  each  should  contribute  to 
the  industries  of  benefit  to  him,  in  proportion  to 
his  need  for  them — that  is,  in  accordance  with  the 
extent  of  his  purchases.  According  to  the  same 
principle  would  capital  be  renewed  under  Moralism. 
In  this  way  teetotallers,  for  instance,  would  not 
have  to  pay  for  or  help  to  keep  up  breweries  or 
distilleries. 

Greater  difficulties  would  be  presented  by  the 
extension  or  increase  of  capital  necessitated  by 
the  increase  of  population  or  by  the  development 
of  the  public  taste,  as  well  as  by  the  starting  of 
new  kinds  of  industry  or  any  forms  of  enterprise 
for  which  there  might  be  a  demand  and  which 
would   require   the   raising    of  new  capital. 

156 


Renewal  of  Industrial  Capital 

An  increasing  population  would   require  an   in- 
creasing    productive     capital.        More     food    and 
clothing  and  other  manufactures  would  have  to  be 
produced.     Capital  would  consequently  have  to  be 
increased    in    proportion    to    the    increase    of    the 
population.     Who  ought  to  provide  this  additional 
capital,  and  how  ought  it  to  be  collected?     It  would 
have  to  be  raised  either  from  the  whole  population 
or  from  the  parents  of  excessively  large  families. 
In  strict  justice,  the  latter,  as  being  wholly  respon- 
sible,   ought    to   supply    the   extra    capital.      That, 
however,    would    be   impracticable.      But  with   the 
population  pressing  on  the   means  of  subsistence, 
the  general  standard  of  comfort  would  be  reduced, 
and  the  necessity  of  having  to  provide  extra  capital 
would    alone    be    sufficient    to    induce    the    great 
majority  of  the  population  to  adopt  effective  means 
of  keeping  the  size  of  all  families  within  bounds. 
How  this  ought  to  be  done  does  not  fall  within  the 
scope  of  the  present  discussion.     In  the  capitalist 
system,  in  which  wealth  is  taken  from  the  workers 
like  honey  from  the  bees,  and  to  such  an  extent  that 
capitalists    are    able    to    save    large    quantities    for 
investment,  there   is  always   a  demand  for  labour 
to  render  the  new  capital  productive.     Were  there 
no  increase  of  population,  there  would  be  no  need 
for  fresh  capital,  which  requires  labour  to  render 
it  valuable,   except  to   oust  what   is  in  antiquated 
form    or    to     provide     for    changes    in    demand. 
Whether    it    is    expended     by    the    capitalists    on 
personal  gratification  or  saved  for  investment  is  of 
little  importance  to  the  workers  under  Capitalism, 

157 


Economic   Moralism 

since  they  have  to  provide  the  capitalists  with  all 
the  wealth  produced  except  what  is  necessary  for 
their  maintenance.  It  would  be  otherwise  under 
Economic  Moralism.  The  pinch  would  be  felt  by 
all,  and  the  cause  of  it  would  be  made  clear.  Large 
families  would  have  to  be  discouraged  in  the 
interest,  not  only  of  the  community  at  large,  but 
of  the  children,  because  parents  depending  solely 
on  their  own  labour  for  the  means  of  livelihood  for 
themselves  and  their  children  would  not  be  able 
to  maintain  their  families  in  the  standard  recog- 
nized as  proper  by  the  community.  But  it  would 
be  difficult  to  arrange  to  keep  the  population  exactly 
stationary,  and  therefore  for  every  department  of 
industry  a  reserve  fund  would  have  to  be  formed 
for  the  purpose  of  increasing  productive  capital 
when  required.  This  reserve  fund  would  have  to 
be  further  increased  to  cover  other  contingencies. 
The  public  taste  for  any  given  commodity  or  ser- 
vice may  develop  or  may  fall  off.  Suppose  that 
the  taste  for  the  drama  grows  to  such  an  extent 
that  new  theatres  are  required  to  meet  the  demand, 
who  ought  to  find  the  extra  capital?  Only  those 
who  frequent  theatres  ought  to  find  it,  and  the 
whole  body  of  them.  At  any  given  time  when  the 
supply  is  just  equal  to  the  demand,  the  conditions 
are  the  most  favourable  for  the  frequenters.  If, 
however,  some  desire  to  go  oftener  to  the  theatre, 
or  if  new  people  acquire  a  taste  for  it,  extra 
accommodation  must  be  provided.  The  old  and 
regular  frequenters  who  are  not  responsible  for  the 
increased  demand  may  resent  an  increase  of  prices, 
but  can  they  in  justice  object?     Under  Economic 

158 


Renewal  of  Industrial  Capital 

Moralism  the  capital  invested  in  the  drama  will  be 
enjoyed  as  free  public  property  by  theatre-goers, 
and  as  they  would  have  no  greater  right  to  it  than 
any  other  citizen,  each  would  have  to  go  seldomer 
to  the  theatre,  or  pay  higher  prices  to  provide 
ample  accommodation  for  all.  The  confirmed 
theatre-goers  who  resented  the  higher  charge  would 
have  inherited  the  theatre.  It  would  have  been 
provided  by  an  earlier  generation,  and  all  they  had 
hitherto  been  called  upon  to  pay  would  have  only 
been  sufficient  to  keep  the  theatre  and  properties 
in  repair.  They  might  well  help  to  erect  other 
theatres  for  themselves  and  those  with  tastes  like 
their  own.  The  aim  would  be  to  charge  a  steady 
price  to  cover*  alf  contingencies,  so  that  there  would 
be  no   fluctuation  to    rouse  resentment. 

Provision  for  the  necessary  increase  of  capital 
in  any  industry  would  have  to  be  made  long  in 
advance  of  requirements,  so  that  it  would  not  bear 
heavily  on  any,  and  would  have  accumulated  by 
the  time  it  was  wanted.  If  the  development  of 
the  public  taste  proved  more  rapid  than  expected,  a 
loan  might  be  obtained  from  the  State  bank.  The 
bank  would  hold  the  reserve  funds  of  all  industries, 
and  as  some  might  have  fallen  in  favour,  the 
reserves  of  such  industries  would  be  available 
for  the  satisfaction  of  the  public  taste  in  other 
departments.  The  State  bank  would  also  accept 
the  savings  of  individuals,  and  guarantee  to  repay 
them,  when  required,  but  without  interest.  It 
would  take  charge  of  the  renewal  funds  and  new 
capital  funds  of  all  kinds,  which  might  have  to 
accumulate    before    being    used    for    their    special 

159 


Economic   Moralism 

purpose,  and  a  certain  proportion  might  be  avail- 
able for  loans  to  industries  whose  new  capital  funds 
had  been  outstripped  by  the  demand.  The  bank 
management  could  easily  arrange  for  the  liquida- 
tion   of    the    loans    to   meet   current    requirements. 

Again,  as  regards  large  districts  or  municipal 
undertakings,  such  as  waterworks,  these  should  be 
provided  for  long  beforehand  by  the  levying  of 
rates  on  the  production  of  the  district  concerned. 
But  the  lack  of  foresight  might  in  certain  cases 
be  compensated  to  a  certain  extent  by  a  loan  from 
the  bank.  Indeed,  to  render  it  possible  for  a 
certain  section  of  the  population  to  save,  imme- 
diate consumption  of  borrowed  wealth  by  another 
section  must  exist  to  a  like  extent. 

How  is  capital  to  be  raised  for  a  new  project? 
If  there  should  be  a  demand,  let  us  say,  for  a 
skating  rink  with  artificial  ice,  where  is  the  capital 
to  come  from?  Not  from  either  an  imperial  or  a 
municipal  tax.  Nor  from  the  State  bank  unless 
its  repayment  were  guaranteed  by  individual 
citizens,  and  only  then  if  there  were  a  superfluity 
of  capital  seeking  investment.  Those  who  might 
be  desirous  of  having  such  a  place  of  amusement 
would  have  to  subscribe  the  capital.  If  the  place 
were  for  the  use  of  the  public,  and,  not  fox  a  private 
club,  a  charge  for  admission  would  be  made  high 
enough  to  maintain  the  rink  in  efficiency  and  pay 
off   gradually   the   original    capital   subscribed. 

The  problem  of  the  maintenance  and  raising 
of  capital  under  Economic  Moralism  really  presents 
but   few    difficulties. 

1 60 


CHAPTER    VII 

THE   EQUITABLE   DISTRIBUTION   OF 
ECONOMIC   RENT 

The  chief  ethical  requirement  in  economics  is  the 
prevention  of  the  appropriation  of  rent,  interest, 
and  profit,  either  by  the  State  for  public  purposes 
or  by  individuals  as  unearned  income.  This  appro- 
priation can  only  be  rendered  impossible  by  the 
institution  of  certain  economic  arrangements  based 
on  the  public  ownership  and  management  of  the 
means  of  production. 

To  a  number  of  these  arrangements  we  have 
already  given  some  consideration.  In  the  present 
instance  we  have  to  deal  with  one  of  the  most 
difficult  problems  of  ethico -economic  reform,  the 
problem  of  the  equitable  distribution  of  economic 
rent,  which,  although  of  very  great  importance 
from  the  ethical  point  of  view,  has  never  received 
any  attention.  What  are  the  economic  arrange- 
ments necessary  to  ascertain  the  rent  and  secure  its 
equitable  distribution? 

Economic  rent,  or,  to  put  it  in  another  form,  the 
physical  basis  of  economic  rent,  will  persist  in  every 
possible  economic  system.     Differences  in  fertility 

161  L 


Economic   Moralism 

of  the  soil  and  of  the  mine,  in  proximity  to 
market,  and  in  the  distance  of  the  consumers  of 
any  given  commodity  from  its  place  of  produc- 
tion, can  never  be  abolished.  How  are  these 
differences  to  be  equalized?  How  are  the  inhabi- 
tants of  any  district  to  be  placed  in  as  favourable 
circumstances  as  those  of  any  other?  In  other 
words,  through  what  channels  are  individuals  to 
receive  their  just  share  of  economic  rent,  and  how 
is  it  to  be  determined?  The  solution  that  springs 
most  readily  to  the  mind  is  one  according  to  which 
the  respective  public  departments  would  charge 
for  every  kind  of  product  a  price  equivalent  to 
the  cost  of  its  production  in  the  least  favourable 
circumstances,  as  is  done  by  capitalists  and 
landowners  now,  and,  unlike  them,  however,  use 
the  economic  rent  communistically.  Socialists,  as 
is  well  known,  hold  that  rent  should  be  State 
income.  But  reasons  against  compulsory  or  State 
communism,  in  whole  or  in  part,  have  already  been 
given,  and  therefore  we  must  now  discover  some 
means  of  ensuring  to  each  individual  his  just  share 
of  economic    rent    to    spend   as   he   pleases. 

Let  us  deal  in  the  first  place  with  what  is  perhaps 
the  most  difficult  part  of  the  problem,  and  try 
to  discover  the  law  in  equity  of  the  incidence  of 
transport — that  is  to  say,  how  the  advantages  and 
the  disadvantages  of  geographical  position  are  to 
be  equalized. 

The  problem  must,  to  begin  with,  be  reduced 
to  its  very  simplest  form  for  the  clearer  under- 
standing of  it  and  in  order  to  facilitate  solution. 

162 


Distribution  of  Economic  Rent 

Imagine  a  small  economically  self-sufficient 
community  with  the  different  raw  materials  obtain- 
able only  in  widely  separated  localities.  It  is 
evident  that  each  locality  must  import  from  the 
other  localities  all  the  raw  materials  it  requires 
except  that  which  it  produces.  Consequently 
transport,  or  the  carriage  of  goods,  will  vary  for 
each  locality  with  the  economic  advantage  of  its 
geographical  position.  From  this  cause  alone, 
apart  from  other  causes  which  will  be  considered 
later,  the  cost  of  living  must  vary  in  these  different 
localities.  The  problem  is  to  discover  how,  and 
from  whom,  and  in  what  proportion,  the  carriage 
of  commodities  is  to  be  collected,  so  that  the 
value  of  the  superior  position  of  this  or  that  locality 
may  be  shared  by  the  other  localities,  and  the  cost 
of  living  be  made  the  same  everywhere — in  other 
words,  so  that  this  portion  of  its  economic  rent 
may   be   equitably   distributed. 

Let    the    following    diagram    represent    such    a 
community  : — 


Wheat 


Coal 

15 

- 
W 

15 

Timber 

5 

C 

XylO 

10 
^Iron 

10 
Sheep 

') 

T 

Fish 

F 

I 

S 

163 


Economic  Moralism 

Here  we  find  that  the  producer  in  the  wheat- 
growing  locality  W,  dealing  with  all  the  other 
localities,  has  to  pay  carriage,  calculated  on  the 
basis  of  distance  alone,  represented  by  the  figures 
15,  10,  10,  15,  20,  or  70  in  all.  Similarly,  the 
producer  in  locality  I  (iron)  must  pay  in  propor- 
tion to  50,  and  the  producer  in  F  (fish)  in  propor- 
tion to  75.  These  figures  are  modified  by  the 
nature  of  the  commodities,  some  costing  more  to 
transport  over  a  given  distance  than  others.  Here, 
then,  we  have  in  these  three  districts  a  great 
difference  between  their  respective  distances  from 
the  aggregate  of  producing  centres.  How  can 
this  difference  be  dealt  with  so  that  all  the 
members  of  the  community  may  be  placed 
economically  on  the   same  footing? 

It  would  be  clearly  unjust  to  compel  the  wheat- 
growers  or  the  fishermen  to  pay  more  in  carriage 
for  their  articles  of  consumption  than  the  coal 
or  iron  producers.  Who  ought  to  pay  for  the 
relatively  high  cost  of  the  living  of  the  farmers 
and  the  fishermen  but  the  consumers  of  wheat 
and  fish,  for  whose  benefit  the  former  live  in  these 
expensive  districts?  It  is  part  of  the  necessary 
cost  of  production  of  wheat  and  fish,  which  ought 
to  be  borne  entirely  by  those  for  whose  benefit 
these  commodities  are  produced. 

In  the  present  system  the  wheat -growers  and 
the  fishermen  pay  the  carriage  of  their  articles 
of  consumption  from  the  place  of  production.  It 
is  included  in  the  price  of  the  goods.  The  conse- 
quence is  that  the  cost  of  living  is  higher  in  some 

164 


Distribution  of  Economic  Rent 

localities  than  in  others.  This  obvious  inequity- 
tends  in  the  present  system  to  be  very  roughly 
rectified  by  a  difference  in  wages,  which  means, 
of  course,  that  the  extra  cost  tends  to  be  placed 
on  the  price  of  the  products  of  such  localities. 
There  is  thus  even  now  an  approximation  to 
equity  as  between  wage -workers,  although  of  course 
the  economic  rent  of  the  cheapest  localities  is 
appropriated  by  the  landowners  and  capitalists. 
But  we  must  have  a  closer  approximation  to 
equity.  Still  keeping  before  us  the  community 
already  imagined,  the  simplest  way  of  attaining 
this  will  be  found  to  be  to  charge  all  the  carriage 
of  the  imports  into  any  locality  in  the  price  of 
the  kind  of  goods  exported  from  it.  It  would 
thus  be  paid  by  the  consumers  of  that  product, 
whether  resident  in  its  place  of  production  or  else- 
where. There  seems  no  other  satisfactory  way  of 
putting  all  citizens,  wherever  located,  on  an  equal 
footing  as  regards  cost  of  living,  in  so  far  as 
it  is  affected  by  the  unequal  economic  advantage 
of  geographical  position.  All  the  consumers  of 
any  given  commodity,  wherever  they  might  be, 
would  get  it  at  the  same  price,  for  no  carriage 
from  the  place  of  production  would  be  paid  by 
them.  They  would,  however,  pay,  as  part  of  the 
cost  of  production,  carriage  included  in  the  price 
of  the  commodity,  namely,  the  proper  proportion 
of  the  carriage  on  all  the  imports  into  the  locality 
or  localities  which  produced  it.  This  constitutes 
an  essential  part  of  the  true  cost  of  production,  and 
each  commodity  would  bear  its  proper  share.     In 

165 


Economic  Moralism 

a  complex  system  with  several  districts  producing 
the  same  kind  of  commodity,  all  articles  would  be 
procured  by  the  local  branch  of  the  distributive 
guild  from  the  nearest  place  of  production,  so 
that  the  carriage  would  cost  as  little  as  possible 
and   economical   production   be   thus   secured. 

But,  it  may  be  asked,  instead  of  charging  the 
carriage  on  the  imports  into  any  district  as  part 
of  the  cost  of  production  of  the  exports,  why  not 
simply  deliver  every  commodity — that  is,  every 
export— carriage  paid,  and  charge  all  the  carriage 
on  the  commodity  itself  in  its  price  as  part  of 
the  cost  of  production?  The  answer  is  that  this 
export  carriage  on  the  commodity  itself  is  not 
so  truly  a  part  of  its  cost  of  production  as  the 
carriage  on  the  commodities  used  by  its  producers, 
or,  to  be  correct,  is  not  a  part  of  its  cost  of 
production  at  all.  The  cost  of  a  commodity  rela- 
tively to  that  of  others  depends  in  part  on  the 
distance  of  its  producing  district  or  districts  from 
the  aggregate  of  producing  districts.  This  varies 
greatly,  and  it  is  this  that  ought  to  affect  prices. 
The  carriage  on  a  commodity  from  its  place  of 
production  to  its  place  of  consumption  is  really 
a  part  of  the  cost  of  production  of  the  commodities 
its  consumers  produce.  The  carriage  of  wheat  to 
the  diamond-fields  or  the  coal-pits  is  no  part  of 
the  production  of  wheat,  and  the  consumers  of 
wheat  cannot  in  justice  be  called  upon  to  pay  it. 
This  fact  is  not  so  clearly  made  manifest  in  our 
imaginary  simple  community  as  in  actual  condi- 
tions, in  which  in  the  matter  of  foodstuffs  alone 

1 66 


Distribution  of  Economic  Rent 

there  would  be  a  choice  between  wheat,  oats, 
barley,  rye,  pease,  rice,  etc.,  necessitating  the  true 
cost  of  each  being  charged  for  it,  so  that  a  just 
estimate  of  its  true  value  might  be  made.  The 
cost  of  a  commodity  affects  the  demand  for  it, 
and  if  the  demand  is  affected  by  a  false  value, 
as  it  would  be,  it  results  in  bad  economy— that 
is,  in  the  consumption  of  a  commodity  for  which 
the  demand  would  be  reduced  if  its  true  cost  were 
charged,  and  in  the  reduced  consumption  of  a 
competing  commodity  whose  price  is  overcharged. 
The  producers  in  every  district  are  entitled  to 
the  sarnie  cost  of  living  as  those  anywhere  else. 
Each  district  has  its  economic  justification,  its 
economic  raison  d'etre,  in  the  commodities  it 
produces  for  exchange  ;  and  the  price  of  every 
commodity  must  be  averaged,  if  there  are  several 
places  of  production,  and  that  price  made  general. 
The  purchaser  of  any  commodity  would  thus  pay 
the  average   price  wherever   he  might   be. 

The  fact,  then,  that  the  consumer  of  any  given 
commodity  would  not  bear  all  the  expense  of 
transport  appears  only  at  first  sight  to  be  a  weak' 
point  of  the  solution.  The  purchaser  of  diamonds 
brought  from  a  great  distance  would  not  pay  the 
carriage  from  the  diamond-fields.  It  would  be 
paid  by  the  purchasers  of  the  kinds  of  goods 
exported  from  his  locality.  He  would  only  pay 
his  share  of  all  the  imports  into  the  diamond- 
fields — that  is,  the  carriage  one  way  only  on  the 
goods  exchanged.  There  seems  to  be  some 
injustice  in  the  former  having  to  pay  carriage  on 

167 


Economic   Moralism 

what  might  be  considered  a  luxury  brought  from 
a  great  distance.  There  are,  however,  only  two 
reasons  for  considering  this  unjust,  namely,  that 
the  article  is  a  luxury,  and  that  it  is  brought  from 
a  great  distance.  But  it  is  impossible  to  differ- 
entiate between  luxuries  and  necessaries.  The 
vegetarian  might  object  to  pay  the  carriage  on 
flesh  for  the  producers  of  the  articles  he  requires 
on  the  ground  that  it  is  worse  even  than  a  luxury. 
And  it  is  equally  impossible  to  make  any  differ- 
entiation on  the  ground  of  heavy  carriage,  because 
some  of  the  commonest  articles  of  food  and  wearing 
apparel  come  from  the   ends  of  the  earth. 

Thus  far  our  hypothetical  simple  community,  in 
which  it  is  evident  that  the  fundamental  law  in 
equity  of  the  incidence  of  transport  is  that  the  cost 
of  the  transport  of  the  imports  into  any  district 
ought  to  be  imposed  on  the  purchasers  of  the  kind 
of  product  exported  from  the  district,  whether  the 
purchasers  reside  in  the  district  or  not,  by  its 
inclusion  in  the  cost  of  production.  This  ensures, 
as  we  have  said,  every  one  getting  commodities 
at  the  same  price,  and  it  also  ensures  the  actual 
cost  of  production  being  arrived  at  and  charged. 

Let  us  now  increase  the  complexity  of  our  hypo- 
thetical community.  We  have  already  seen  that 
with  a  number  of  districts  producing  the  same  kind 
of  commodity  for  export,  the  average  cost  of 
production,  including  carriage  of  imports  into  these 
districts,  must  be  ascertained  and  charged.  If, 
however,  not  one  but  several  kinds  of  products 
were  exported   from   any    district,   how  would   the 

168 


Distribution  of  Economic  Rent 

amount  of  carriage  on  imports  to  be  charged 
against  each  kind  be  ascertained?  The  obvious  way 
of  overcoming  the  difficulty  would  be  to  distribute 
the  carriage  on  all  imports  over  the  various  kinds 
of  goods  exported,  each  kind  of  goods  being 
debited  its  share  in  proportion  to  the  total  labour 
time  expended  locally  in  its  production.  This 
would  be  a  close  approximation  to  justice. 

But  to  go  still  farther.  Imports  would  be 
required  also  for  workers  in  the  district  employed 
in  supplying  local  needs — plumbers,  joiners, 
painters,  artists,  actors,  scavengers,  clergymen. 
It  would  be  hardly  possible  to  ascertain  how  much 
each  class  of  export  workers  contributed  to  the 
maintenance  of  these  people,  but  the  average  for 
each  district  would  vary  little,  and  as  these 
people  would  all  be  necessary  for  the  whole  body 
of  export  workers,  the  carriage  on  their  imported 
articles  of  consumption  would  have  to  be  charged 
against  the  exports  of  the  district.  Therefore,  here 
again  the  plan  of  simply  charging  all  the  carriage 
into  any  district  on  the  commodities  exported  would 
apparently  meet  the  demands  of  justice. 

This  question  regarding  the  equitable  incidence 
of  transport  charges,  which  is  merely  broached 
here,  while  it  is  one  of  the  most  important  of  the 
many  that  must  be  answered  before  justice  can 
be  introduced  into  economic  arrangements,  is  one 
of  the  most  difficult  in  constructive  economics, 
owing  to  the  mental  confusion  caused  by  the  extra- 
ordinary intricacy  of  exchange  under  Capitalism, 
and  even   when  the  simplicity  of  exchange  under 

169 


Economic  Moralism 

Economic   Moralism   is   grasped,   it    presents   con- 
siderable difficulty. 

Meantime,  there  are  no  proposals  that  can  be 
put  over  against  the  solution  just  suggested  except 
that  of  free  railways  advocated  by  Socialists.  It 
is  difficult  to  say  what  is  meant  by  "  free  "  rail- 
ways. Vagueness,  as  in  the  case  of  all  communist 
proposals,  is  its  most  prominent  characteristic. 
The  railway  working  expenses,  such  as  cost  of 
maintenance  and  the  cost  of  labour  directly  engaged 
in  transport,  must  be  raised  in  some  way.  If 
not  by  charging  the  cost  of  transport  on  the  goods 
carried,  it  can  only  be  done  by  means  of  arbitrary 
taxation,  every  one  being  taxed,  not  in  proportion 
to  the  use  he  makes  of  the  railways,  but  in  pro- 
portion to  the  fraction  he  forms  of  the  total 
population,  or  perhaps  in  proportion  to  his  earnings 
or  savings,  or  their  economic  equivalent  under 
Socialism,  whatever  it  is,  or  to  his  supposed  ability 
to  pay.  No  argument  is  brought  forward  in  favour 
of  the  change,  the  mere  fact  of  calling  a  service 
"  free  "  seeming  to  throw  a  magical  glamour  over 
any  such  proposal.  But  it  would  be  an  unjust 
and  uneconomical  system  :  unjust,  because  the 
individual  would  not  have  to  pay  in  proportion  to 
the  socially  necessary  carriage  in  connection  with 
the  production  of  the  articles  he  consumes,  but 
would  be  obliged  to  pay  a  share  of  the  total 
expenditure  bearing  no  proportion  to  his  demands 
on  the  transport  system  ;  uneconomical,  because 
he  would  be  unable  to  practise  true  economy,  the 
real  cost   of  production   of   any  article  not   being 

170 


Distribution  of  Economic   Rent 

shown  or  charged.  It  cannot  be  maintained  that 
the  result  is  practically  the  same  whether  the  total 
transport  expenses  are  divided  equally  among  the 
adult  population,  each  being  charged  with  the  aver- 
age cost  per  head,  or  whether  the  average  cost  of 
carriage  on  goods  imported  for  the  use  of  the 
producers  of  any  commodity  or  for  use  in  its 
manufacture  is  collected  from  the  buyers  of  that 
commodity.  There  is  really  a  great  difference.  In 
the  first  case,  every  individual  must  pay  his  share 
of  the  total,  whether  he  consumes  much  or  little, 
while  in  the  second  the  individual  has  it  made 
possible  for  him  to  purchase  what  he  does  require, 
much  or  little,  at  the  actual  cost  of  each  article 
averaged  over  its  consumers. 

Having  given  a  rough  sketch  of  a  proposal  for 
equitably  distributing  the  advantages  of  proximity 
to  producing  centres,  we  must  consider  how  the 
advantages  of  fertility— i.e.  economic  rent  due  to 
fertility— can  be  equitably  shared.  Take  the  wheat 
lands.  Land  under  wheat  varies  in  fertility.  How 
are  the  prices  to  be  fixed?  On  the  best  land  it 
costs  less  labour  to  produce  wheat  than  on  inferior 
lands.  Neither  the  actual  producers  of  wheat  nor 
any  section  of  consumers  must  under  Economic 
Moralism  reap  that  advantage  for  themselves.  All 
districts  of  comparatively  low  economic  value, 
occupied  owing  to  pressure  of  population,  must 
receive  their  equitable  share  of  economic  rent. 
They  must  be  levelled  up.  The  plan  for  securing 
equity  in  this   matter  that  at  once  presents   itself 

171 


Economic  Moralism 

is  that  of  averaging  the  cost  of  production  all 
over  the  country.  The  agricultural  or  farmers' 
guild  would  be  informed  of  the  wants  of  the  country 
and  would  get  the  wheat  produced  for  each  district 
with  the  least  expenditure  of  labour  in  cost  of 
production  and  carriage.  The  cost  of  production 
plus  carriage  on  imports  into  the  productive  centres, 
as  already  described,  would  then  be  averaged  from 
the  figures  received  from  the  various  agricultural 
centres.  To  charge  this  average  price  all  over 
seems  a  perfectly  fair  arrangement. 

There  is,  however,  an  objection  to  it,  which 
must  be  considered.  If  in  a  simple  self-contained 
community,  such  as  has  already  been  under  con- 
sideration, wheat  can  be  grown  at  S  (sheep), 
although  not  so  cheaply  as  at  Wi  (wheat),  it  may 
nevertheless  be  delivered  at  S  more  cheaply  than 
from  W  owing  to  the  saving  in  carriage.  With 
the  system  of  averaging  it  would  appear  that  while 
the  consumers  of  sheep  would  have  a  lower  price 
to  piay  for  sheep  owing  to  saving  in  carriage  of 
wheat,  the  consumers  of  wheat  would  have  a  higher 
price  to  pay  for  wheat  owing  to  the  higher  cost  of 
production  at  S.  On  the  other  hand,  however,  it  is 
clear  that  if  wheat  could  be  grown  at  S  more 
cheaply  than  at  W,  although  not  sufficiently  cheap 
for  export,  owing  to  the  distance  from  other  centres 
of  consumption,  the  wheat  consumers  would  benefit. 
Moreover,  as  it  is  a  clear  gain  to  every  person  in 
the  community  that  economy  in  production,  which 
of  course  includes  carriage  to  consumer,  should  be 
made    a    general    principle,    and    should    be    the 

172 


Distribution  of  Economic  Rent 

guiding  principle  in  every  department,  any  loss 
in  one  direction  is  probably  counterbalanced  by 
a  gain   in  another. 

But  the  solution  of  the  problem  seems  to  be 
that  while  the  consumers  in  all  the  various  districts 
alike  should  be  charged  the  average  cost,  the 
difference  between  the  actual  and  the  average  cost 
should  be  collected  from  the  consumers  of  the 
exports  from  these  districts,  when  the  actual  cost 
is  higher,  and  credited  when  lower — that  is,  added 
to  or  deducted  from  the  prices.  Naturally  the 
actual  cost  of  commodities  delivered  to  the  different 
districts  will  vary  according  to  the  economic  posi- 
tion of  the  districts.  The  workers  in  any  district 
must  not  be  penalized  if  the  cost  be  higher  than 
the  average,  nor  favoured  if  it  be  lower.  There- 
fore they  must  be  charged  the  average  price.  But 
the  productive  guilds  which  produce  the  exports 
would  be  provided  with  the  figures  of  both  the 
actual  cost  and  the  average  cost,  and  would  add  to 
or  deduct  from  the  price  of  their  respective  products 
the  proportional  share  of  the  difference.  The  agri- 
cultural guild  would  collect  for  wheat,  for  instance, 
from  the  district  distributive  guild  the  actual  price 
of  the  wheat  supplied,  which  would  be  produced  in 
the  wheatlands  most  economically  convenient,  both 
fertility  and  transport  being  taken  into  account. 
But  the  distributive  guild  would  collect  from  the 
consumer  the  average  pirice.  If  the  latter  were 
less  than  the  actual,  the  difference  would  be  col- 
lected from  the  exporting  productive  guilds  of  the 
district,  and  if  greater  the  latter  would  be  credited 

173 


Economic  Moralism 

with  the  difference.  C's  workers,  for  instance, 
would  be  charged  the  average  price  of  wheat. 
If  it  were  imported,  the  cost  of  carriage  would 
be  placed  upon  the  price  of  the  export,  coal,  for 
the  production  of  which  the  workers  are  there. 
If  it  were  found  cheaper,  all  things  considered,  to 
grow  the  wheat  at  C  for  local  consumption,  the 
population  at  C  would  still  be  charged  the  average 
price  j  but  the  difference  between  the  actual  cost 
and  the  average  price  would  be  credited  or  debited, 
as  the  case  might  be,  to  the  coal  guild,  which 
in  any  case  would  save  carriage,  and  the  price  of 
coal  would  be  reduced,  which  would  be  just,  for 
while  coal-users  ought  to  prevent  those  who  work 
for  them  from  suffering  the  disadvantages  of  the 
coal  district  by  delivering  all  their  articles  of  con- 
sumption at  the  average  prices,  paying  the  carriage 
themselves,  they  ought  to  reap  the  advantages  of 
greater  economy  in  production,  if  any.  Under 
Economic  Moralism  there  must  be  a  system  of 
strict  accounting,  not  only  for  the  purpose  of 
arriving  at  the  average  price  which  is  to  be  col- 
lected from  consumers,  but  also  for  the  correct 
appraisement  of  the  economic  value  of  every  dis- 
trict and  for  the  correct  pricing  of  its  productions. 
The  actual  cost  of  living  must  therefore  be  ascer- 
tained and  charged  against  its  productions.  But 
the  workers  in  any  district  must  not  be  penalized 
if  the  cost  be  higher  than  the  average,  nor  favoured 
if  it  be  lower.  Therefore  they  must  be  charged  the 
average   price, 

Another  problem  in  economic  rent  may  be  con- 
174 


Distribution  of  Economic   Rent 

sidered  here.  At  present  superior  coal  commands 
a  comparatively  high  price  owing  to  its  quality. 
Although  it  may  cost  less  to  win,  it  costs  more  to 
buy.  Undoubtedly  the  higher  price  prevents  all 
the  best  class  of  coal  from  being  used  up  in  prefer- 
ence to  the  inferior.  It  may  be  said  that  in  this 
way  the  interests  of  future  generations  are  pro- 
tected, but,  looked  at  closely,  it  is  apparent  that 
under  Capitalism  the  nation  does  not  benefit,  but 
only  those  who  can  afford  high  prices  in  the  present 
or  the  future.  But  on  what  grounds  would  it  be 
justifiable  under  Moralism  to  depart  from  the  prin- 
ciple of  basing  price  on  the  cost  of  production? 
If  the  price  of  the  best  coal  were  based  on  the 
cost  of  production,  and  if  this  cost  were  less  than, 
or  equal  to,  or  even  upi  to  a  certain  point  higher 
than  that  of  inferior  coal,  every  one  would  demand 
it.  But  it  would  probably  be  impossible  to  supply 
the  demand.  In  that  case,  would  the  quantity 
allowed  each  citizen  be  limited,  and  would  the 
demand  of  each  be  supplied  in  a  certain  order, 
decided,   say,   by   ballot? 

There  would  be  no  injustice  in  such  an  arrange- 
ment, but  in  addition  to  its  inherent  clumsiness, 
there  is  a  serious  objection.  On  the  best  coal  there 
would  be  incurred  heavy  carriage  to  all  parts  of  the 
country,  which  might  be  avoided  if  the  demand 
for  it  were  reduced,  and  inferior  coal  taken  from 
more  convenient  mines.  Coal  consumers  would 
not  pay  the  carriage  directly,  but  they  would 
indirectly,  and  it  would  be  to  the  interest  of  all  to 
save  this  carriage.  Therefore,  if  otherwise  justifi- 
es 


Economic   Moralism 

able,  prices  would  have  to  be  adjusted  to  equalize 
the  demand.  Use  values  must  to  a  certain  extent 
be  taken  into  account  in  the  fixing  of  prices.  No 
one  will  pay,  or  should  be  asked  to  pay,  as  much 
for  an  inferior  article  as  for  a  superior  one.  In 
the  case  of  a  manufactured  article  the  guild  con- 
cerned in  its  manufacture  would  have  to  accept  a 
lower  price  for  the  labour  expended  on  it,  and 
the  loss  would  have  to  be  borne  entirely  by  the 
person  or  persons  at  fault,  or  shared  between  them 
and  their  fellow- workers  in  the  guild.  In  the 
case  of  a  natural  product  like  coal,  the  use  value 
of  one  kind  of  coal  can  easily  be  compared  with 
that  of  another,  and  the  relative  values  struck. 
The  heat-producing-power,  the  rate  of  consumption, 
and  the  cleanliness  can  be  compared  and  valued.  If 
the  prices  were  truly  adjusted  on  such  lines,  it 
would  become  to  most  people  a  matter  of  indiffer- 
ence what  kind  of  coal  they  used,  and  consequently 
the  coal  nearest  the  place  of  consumption  would 
naturally  be  taken.  The  prices  charged  on  the 
various  kinds  of  coal  would  only  be  sufficient 
to  meet  all  the  expenses  of  mining  all  the  coal, 
the  higher  prices  of  the  best  coal  being  used  for 
the  reduction  of  the  prices  of  the  inferior  sorts 
below  the  actual  cost  of  production.  Coal  is  simply 
the  means  of  producing  heat  at  a  certain  rate  with 
certain  accompanying  discomforts.  It  is  the  possi- 
bility of  heat  that  is  bought.  And  it  is  the  price 
of  heat  that  should  be  made  the  same  everywhere. 
But  this  implies  various  prices  for  coal,  the  heat- 
producer.      Therefore   the   principle   of    selling   at 

176 


Distribution  of  Economic   Rent 

the  cost  of  production  is  really  not  departed  from. 
In  a  sense  this  is  another  phase  of  the  equitable 
distribution  of  economic  rent.  The  districts  near 
the  deposits  of  the  best  coal  would  be  economically 
in  a  better  position  than  other  districts,  if  prices 
were  not  adjusted  in  the  way  suggested.  A  ques- 
tion naturally  arises  at  this  point,  one  of  great 
gravity  for  Britain  at  the  present  day.  To  what 
extent  ought  any  given  country  to  allow  its  coal 
and  other  mineral  deposits  to  be  exhausted  by 
export  to  other  countries?  In  a  rational  social 
system  the  question  would  not  present  such  diffi- 
culty. Economically  it  is  unjustifiable  to  work 
out  the  deposits  of  any  one  country  to  supply  others 
that  have  deposits  of  their  own,  which,  however,  it 
may  be  rather  more  expensive  to  work.  Such  a 
system  may  suit  the  pockets  of  the  generation  that 
initiates  it  and  a  number  of  succeeding  generations. 
But  the  patrimony  of  future  generations  must  be 
jealously  guarded.  Later  generations  in  the  im- 
porting countries  will  have  to  work  their  deposits, 
not  only  for  themselves,  but  for  the  country  which 
at  present  supplies  them,  and  the  measure  of 
economic  loss  would  be  the  cost  of  transport  of 
coal  between  such  countries  and  the  higher  depre- 
ciation charges.  The  latter  item  is  explained  by 
the  fact  that  if  a  mine  is  to  be  exploited  at  express 
speed,  more  miners  will  be  required,  and  conse- 
quently more  house  accommodation,  etc.  As  the 
life  of  the  mine  is  shortened,  the  time  will  the 
sooner  come  when  the  mining  village  will  be  no 
longer   required,   and   the   necessary   compensation 

177  M 


Economic  Moralism 

must  be  provided  for  by  the  increase  of  the  depre- 
ciation fund  through  enhanced  prices.  As  regards 
immediate  action,  the  problem  is  not  so  simple. 
A  large  part  of  the  population  derive  their  live- 
lihood from  the  exploitation  of  coal-mines  for 
behoof  of  foreign  countries.  Stop  or  reduce 
exportation,  and  these  people  lose  their  livelihood. 
Under  Capitalism  the  problem  of  finding  other 
means  of  livelihood  economically,  justifiable 
presents  extraordinary  difficulties.  With  an 
ethically  reasonable  economic  system  in  working 
order,  if  the  country  were  economically  unfit  to 
support  such  people  without  reducing  the  standard 
of  living,  voluntary  emigration  could  be  arranged. 
If  the  country  were  not  fully  exploited,  that  fact 
would  be  known,  and  they  would  be  drafted  into 
other  industries  without  much  delay  or  friction. 

The  economic  rent  of  all  building  sites  except 
those  of  dwelling-houses  will  disappear,  for  the 
causes  which  operate  now  in  making  one  site  more 
valuable,  or  rather  rentable,  than  another  will  do 
so  no  longer.  Shops,  factories,  railway-stations, 
and  other  buildings  for  productive  and  distributive 
purposes  will  have  become  public  property. 
Monopoly  rent,  exigible  under  Capitalism,  will  not 
be  charged  for  their  sites,  and  their  economic  rent, 
that  which  arises  from  proximity  to  a  market  or 
from  any  other  advantage  of  position,  will  be 
equitably  shared,  as  already  shown — that  which, 
for  instance,  arises  under  Capitalism  from  position 
in   a  thoroughfare,   which   enhances   the  value   of 

178 


Distribution  of  Economic  Rent 

shops  owing  to  the  large  number  of  customers 
drawn  from  passers-by,  and  which  is  part  of  the 
profit  on  the  larger  turnover,  having  no  exist- 
ence under  Economic  Moralism.  Stores  for  the 
exhibition  and  sale  of  goods  will  be  placed  in  the 
most  convenient  situations,  but  as  only  the  cost  of 
labour  and  upkeep  will  be  charged  to  consumers, 
there  will  be  no  profit  and  therefore  no  rent.  All 
such   buildings  will  be  public  property. 

But  what  about  buildings  belonging  to  private 
persons,  such  as  dwelling-houses?  The  question 
as  to  whether  dwelling-houses  should  be  private 
property  or  public  property  has  already  been 
touched  upon.  What  is  now  to  be  considered 
is  how  much,  if  any,  economic  rent  accrues  on  the 
sites.  But  in  this  connection  there  is  first  the 
question  of  the  extent  of  site  to  be  allowed  each 
citizen  for  personal  use.  We  must  not  evade  the 
point  by  saying  that  this  twill  be  decided  at  the 
time  in  democratic  fashion  by  the  majority.  The 
temptation  to  relegate  all  such  problems  to  the 
future  is  great,  but  should  be  resisted.  We  must 
try  to  discover  the  principles  according  to  which 
it  ought  to  be  settled  by  the  majority  or  their 
representatives.  If  there  were  plenty  of  waste  land 
unfit  for  cultivation  in  suitable  position  for 
dwelling-houses,  the  only  limit  to  the  land  allowed 
each  individual  for  private  use  would  be  the 
demand  of  his  contemporaries  and  the  probable 
necessities  of  future  generations.  If  the  only  land 
available  were  under  cultivation,  what  might  be 
required   for    dwellings    and    gardens   would    have 

179 


Economic   Moralism 

to  be  replaced  for  that  purpose  by  an  equivalent 
extent  of  land  somewhere  else.  This  would 
probably  mean  an  increase  of  the  cost  of  produc- 
tion or  of  the  carriage  of  agricultural  products, 
and  it  would  be  borne  by  the  consumers  of  the 
products   of    the    district,    not    by    the    producers. 

But  it  is  clear  that  every  citizen  requires  a  site 
for  dwelling-houses  and  a  site  free  of  any  rent 
except  such  as  might  be  offered  in  competition, 
should  the  site  be  particularly  desirable  within 
the  free  area  available.  The  extent  of  the  site 
would  have  to  be  limited.,  if  cultivated  ground 
had  to  be  taken.  But  there  would  probably  be 
little  difficulty  in  practice,  for  although  many  might 
wish  a  garden,  they  would  not  wish  a  large  one, 
as  they  would  have  to  cultivate  it  themselves. 
Those  who  like  large  gardens  would  probably  live 
in  associated  homes  with  large  common  gardens 
attached. 

Within  each  area — village,  town,  or  city — there 
will  be  some  sites  more  desirable  than  others, 
although  general  opinion  may  not  agree  as  to 
the  desirableness,  and  there  will  therefore  be 
economic  rent  to  deal  with,  to  determine,  levy, 
and  distribute.  Economic  rent  in  such  cases  is 
the  value  of  any  site  superior  to  the  least  desirable 
site,  which  of  course  has  no  rent.  The  desirable- 
ness of  any  site  will  depend  on  the  beauty  of  its 
outlook'  and  surroundings,  its  climatic  position, 
exposure  to  sun  and  shelter  from  wind,  its 
proximity  to  the  workplace  of  the  tenant.  In  the 
present  age  comparatively  few  people  appraise  the 

1 80 


Distribution  of  Economic  Rent 

beauty  of  a  site  highly,  but  even  now  competition 
for  a  beautiful  site,  although  restricted  to  a  small 
number,  is  very  keen.  It  will  become  keener  as 
the  aesthetic  sense  is  developed  in  a  greater  number 
of  people.  The  economic  rent  of  such  a  site  is 
nowadays  settled  by  what  the  highest  bidder  will 
give,  and  the  seller  or  owner  pockets  the  value 
of  it.  Under  conditions  of  equity,  if  economic 
rent  should  be  exigible,  it  would  have  to  go  to 
those  who  are  deprived  of  the  right  to  enjoy  the 
beautiful  site,  not  indeed  for  personal  use,  but  for 
the  general  embellishment  of  the  communal  sur- 
roundings. How  is  this  amount  to  be  ascertained? 
Can  it  be  ascertained  in  any  other  way  than  by  the 
competition  of  those  who  desire  the  place  and 
are  willing  to  pay  for  it?  To  all  appearance  it 
cannot.  But  how  often  might  the  occupier  be 
disturbed,  or  have  the  economic  rent  increased? 
It  seems  unjust  to  disturb  the  occupier,  or  make 
any  change  during  his  lifetime,  or  the  lifetime 
of  his  wife  or  lineal  descendants,  except  perhaps 
at  long  and  fixed  intervals.  But  the  occupier  would 
be  free  to  leave  at  any  time,  and  then  the  place 
might  be  given  to  the  highest  bidder,  and  as  all 
would  have  equal  opportunity  of  earning,  the 
amount  offered  would  not  be  an  inflated  one,  but 
would  approximate  to  the  just  price.  Climatic 
position  would  naturally  be  linked  with  beauty 
of  position.  But  if  the  building  were  the  property 
of  the  occupier  or  if  the  site  had  been  improved 
and  beautified  by  him1,  how  would  this  affect  the 
price  of  the   site?     Its  full  value  could   be  ascer- 

181 


Economic   Moralism 

tained  and  the  economic  rent  calculated  by 
deducting  the  actual  cost  of  the  building  and  the 
improvements,  less  depreciation,  from  the  total. 

But  what  about  proximity  to  the  workplace? 
Homes  for  farmer  and  assistants  must  be  provided 
at  a  convenient  spot  on  a  farm,  for  colliers  and 
miners  near  the  pits  and  mines,  and  for  fishermen 
at  the  harbours.  But  in  the  larger  towns,  where 
manufacturing  is  done  for  export,  houses  for  the 
workers  in  any  factory  will  not  necessarily  be 
clustered  round  the  factory.  Some  people  prefer 
to  be  near  their  work,  others  to  be  far  from  it. 
Hence  the  whole  area  of  the  town  will  be  open 
to  all  the  workers.  But  among  the  applicants 
for  a  vacant  house  that  person  ought  to  get  it 
whose  place  of  work  is  nearest  to  it. 

In  a  sparsely  populated  district  inhabited  only 
by  a  few  farmers,  fishermen,  or  miners,  there  will 
be  certain  necessary  expenses  which  will  be  greater 
there  than  in  a  densely  peopled  district.  For 
instance,  the  cost  of  education  will  certainly  be 
higher  where  a  small  number  of  children  must 
be  provided  with  the  varied  and  specialized  educa- 
tion which  can  only  be  given  economically  in  a 
populous  centre.  Such  extra  expense  must  be 
borne  by  the  industries  in  which  the  parents  are 
engaged  and  which  exist  for  the  benefit  of 
consumers.  Equal  educational  facilities  must  be 
provided  everywhere,  and  the  same  fees  must  be 
charged  the  parents  everywhere,  namely,  |at  the 
rate  necessary  to  cover  the  average  cost,  but  the 

182 


Distribution  of  Economic  Rent 

difference  between  this  cost  and  that  of  the  dearer 
districts  must  be  charged  against  the  industry'  in 
which  the  parents  are  employed.  Similar  treat- 
ment must  be  accorded  to  the  expense  of  sending 
children  in  the  country  to  a  school  at  a  distance. 
In  country  districts  there  are  fewer  facilities 
for  lectures,  concerts,  theatrical  performances  than 
in  towns.  But  in  the  towns,  on  the  other  hand, 
there  are  not  the  same  opportunities  for  country 
pleasures  and  sports.  The  final  result  will 
doubtless  be  that  those  fond  of  country  life  will 
settle  in  the  country  and  those  with  other  tastes 
will  gravitate  to  the  towns.  Arrangements  could 
be  made  for  transference  from  one  place  to 
another  as  desired,  as  at  present  is  the  vogue  in 
some  branches  of  the  Civil  Service.  Exchanges, 
either  temporary  or  permanent,  could  easily  be 
made.  As  regards  lectures,  etc.,  it  seems  likely 
that  science  will  by  means  of  electricity  enable 
the  lecturer,  the  singer,  and  the  actor  to  reach 
their  audiences  simultaneously  in  all  parts  of  the 
country  both  visually  and  audibly. 


i83 


CHAPTER     VIII 

FOREIGN   TRADE   AND   PROTECTION 

The  question  of  foreign  trade  under  Economic 
Moralism  has  two  very  different  aspects.  There 
is  the  problem  of  trade  with  other  Moralist 
countries,  and  there  is  the  problem  of  trade  with 
non-Moralist   countries. 

The  simplest  problem  is  that  of  foreign  trade 
when  all  countries  are  Moralist,  and  this  must  be 
dealt  with  first.  Under  universal  Economic 
Moralism  there  will  be  no  temptation  for  any 
country  to  increase  its  wealth  at  the  expense  of 
another,  or  to  encourage  the  increase  of  its  popula- 
tion for  the  purpose  of  using  its  superior  strength 
in  military  aggression.  As  each  country,  however, 
plays  its  part  in  the  economy  of  nations,  it  must 
be  prepared  to  contribute  to  the  world's  gieneral 
stock  against  fair  exchange  whatever  it  is  fitted 
specially  to  produce,  either  in  the  form  of  raw 
materials  or  manufactured  product.  Owing  to  the 
ever  growing  facilities  of  communication  the  world 
is  daily  becoming  smaller,  and  it  will  soon  be 
generally  recognred  that  the  natural  advantages 
of  every  country  shouM  be  treated  as  international 

184 


Foreign  Trade  and  Protection 

property,  and  its  economic  rent  distributed  accord- 
ing   to    ethical    principles. 

Under  Economic  Moralism  there  will  be  no 
tribute  paid  by  one  country  to  the  capitalists  of 
another  in  the  shape  of  dividends  on  investments. 
There  will  be  no  combination  of  capitalists  to 
control  prices,  monopolize  trade,  and  retain  it  in 
certain  countries  without  economic  justification,  to 
use  the  power  of  the  State  to  protect  their  interests 
by  means  of  customs  duties.  The  economic  value 
of  each  country  will  be  unerringly  ascertained  by 
the  almost  automatic  collection  of  statistics.  The 
cost  of  production  of  every  commodity  and  service 
will  be  calculated  in  terms  of  human  labour, 
uncomplicated  by  the  vagaries  of  a  currency  based 
on  any  of  the  precious  metals,  or  by  prices  regulated 
by  supply  and  demand.  The  cost  of  production 
of  any  article  in  any  country  it  will  be  possible 
to   compare  with  its  cost   in  any  other  country. 

Let  us  simplify  the  problem,  and  consider  the 
case  of  only  two  countries  trading,  say  Denmark 
and  Britain,  cut  off  from  the  rest  of  the  world. 
Denmark  has  no  minerals,  and  must  obtain  them 
from  Britain.  Obviously,  if  Britain  has  all  the 
advantages  of  Denmark  and  minerals  in  addition, 
and  if  Britain  could  support  the  population  of 
Denmark  as  well  as  her  own,  without  increasing  the 
cost  of  production,  it  would  theoretically  be  to  the 
economic  advantage  of  all  to  transfer  the  Danes 
to  Britain.  The  cost  of  transport  between 
Denmark  and  Britain  would  be  a  heavy  burden  on 
both  countries,    and   the   only  economic   argument 

185 


Economic  Moralism 

against  the  transfer  would  be  one  which  would 
prove  that  the  extra  capital  required  at  once  in 
Britain  for  the  increased  population  would  exceed 
the  savings  at  the  disposal  of  the  national  bank 
for  investment.  If,  however,  there  was  a  great 
desire  to  "  save  "  for  future  use,  the  extra  capital 
required  for  the  transfer  might  (enable  such  a  desire 
to  be  gratified,  for  if  the  sum  to  be  repaid  annually 
were  equal  to  the  annual  cost  of  the  transport 
saved,  the  economic  advantage  of  the  transfer 
would  be  decisive.  Although  in  actual  practice 
expatriation  on  a  large  scale  is  out  of  the  question, 
let  us  develop  the  argument  farther  on  a  hypo- 
thetical basis,  in  order  to  arrive  at  the  fundamental 
principles  of  equitable  international  exchange  of 
commodities  and  services.  We  must  consider  two 
contingencies,  namely,  the  refusal  of  the  Danes 
to  be  expatriated  although  it  would  be  to  their 
advantage  economically,  and  secondly,  the  necessity 
of  the  occupation  of  Denmark  because  an  increase 
of  the  population  of  Britain  would  result  in  an 
increase  in  the  cost  of  living  owing  to  the  law  of 
diminishing  returns. 

In  the  first  case,  the  Danes  would  have  to  bear 
all  the  transport  expenses.  They  would  of  course 
have  to  send  goods  in  payment  for  the  minerals. 
If  it  were  arranged  that  they  should  send  dairy 
produce,  so  much  less  dairy  produce  would  have 
to  be  raised  in  Britain.  All  the  transport  of 
exports  and  imports  would  be  paid  by  the  Danish 
consumer  of  minerals.  A  similar  arrangement 
would  hold  good  for  St.  Kilda  islanders  or  Skye 

1 86 


Foreign  Trade  and  Protection 

crofters,  who  would  not  leave  their  native  place,  if 
required  for  the  same  reasons. 

In  the  second  case,  who  ought  to  pay  the  cost 
of  transport?  If  the  Danes,  then  the  cost  of  living 
would  be  higher  in  Denmark  than  in  Britain,  and 
such  injustice  would  have  to  be  obviated.  This 
could  be  done  by  applying  the  law  of  the  incidence 
of  transport  already  expounded.1  According  to 
this  law  the  cost  of  the  transport  of  dairy  produce 
to  Britain  would  be  charged  on  all  minerals 
consumed  in  Britain  and  Denmark,  and  the  cost 
of  the  transport  of  the  minerals  to  Denmark 
would  be  charged  on  all  dairy  produce  consumed 
in  the  two  countries. 

Now,  suppose  the  cost  of  production  of  one  or 
more  articles  to  be  greater  in  Denmark  owing  to 
natural  disadvantage,  say  that  of  climate.  Suppose 
dairy  produce  is  dearer  there.  Are  the  Danes 
to  work  harder  for  a  living  because  they  happen 
to  be  left  with  a  country  of  economic  inferiority? 
Certainly  not.  Countries  in  the  Moralist  union 
must  have  the  prices  of  commodities  equalized. 
Therefore  the  price  of,  say,  butter  must  be  the 
same  in  Denmark  and  England.  For  this  purpose 
the  statistics  of  production,  showing  the  time 
expended  and  the  quantity  of  commodity  produced, 
must  be  sent  up  from  every  farm  and  factory  to 
a  district  office,  from  every  district  office  to  a 
higher  one,  until  they  reach  the  national  office. 
But  they  must  go  farther.  They  must  reach  an 
international  office,  where  international  prices 
would  be  struck  periodically. 
1  Chapter  VII. 
187 


Economic  Moralism 

If,  then,  agricultural  produce  cost  more  in 
Denmark',  and  if  the  quantity  required  by  the  Danes 
could  not  be  produced  with  less  labour  in  Britain, 
Britain  must  export  to  Denmark  sufficient  to 
compensate  for  the  actually  higher  cost  of  living 
in  Denmark'.  Farmers  and  their  assistants  in 
Britain  and  Denmark  would  receive  payment  for 
the  labour  time  they  expend  in  production,  so 
that  they  will  be  paid  at  the  same  rate  in  the 
one  country  as  in  the  other.  The  Danish  agri- 
culturist will  not  suffer  because  he  is  unable  to 
produce  as  much  as  in  Britain  with  any  given 
expenditure  of  labour.  Neither  will  the  consumer 
in  Denmark.  The  price  of  agricultural  produce 
will   be   the   same   in  both  countries. 

But  this  condition  of  things  would  have  an 
important  effect  on  the  trade  between  the  countries. 
Britain  would  be  in  the  position  of  debtor  to 
Denmark.  If  it  requires  120  men  in  Denmark  to 
raise  as  much  agricultural  produce  as  100  men 
in  Britain,  the  extra  20  per  cent,  would  have 
to  be  supported  by  the  consumers  in  proportion 
to  their  numbers  in  both  countries.  If  the  popula- 
tions be  equal,  Britain  would  have  to  export 
sufficient  to  pay  off  the  debt  of  10  per  cent. 
Say,  Denmark's  agricultural  population  must 
receive  in  payment  for  labour  £120,000,000,  and 
the  British  get  £100,000,000,  the  same  quantity 
of  goods  being  produced  in  each  country.  The 
cost  of  living  with  regard  to  agricultural  produce 
would  evidently  be  20  per  cent,  higher  in  Denmark, 
unless   by   equalizing   prices   the  cost  were  spread 

188 


Foreign  Trade  and  Protection 

over  all  consumers  equitably.  By  equalizing  prices 
£110,000,000  would  be  got  from  consumers  in 
Britain  and  the  same  sum  in  Denmark,  and  ten 
millions  would  have  to  be  exported  to  Denmark 
to  make  up  for  the  difference  between  the 
£120,000,000  paid  to  the  producers  and  the 
£110,000,000  collected  from  consumers. 

iWhat  commodities  would  Tbe  exported  from 
Britain?  If  the  cost  of  production  of  all 
commodities  be  the  same  in  both  countries,  the 
commodities  exported  would  be  those  that  would 
cost  the  least  to  carry,  and  they  would  constitute  a 
permanent  export,  for  steadiness  of  demand  and 
supply  would  be  an  essential  feature  of  exchange 
under  Economic   Moralism. 

But  if  certain  commodities  were  produced  with 
less  expenditure  of  labour  in  Britain,  these  would 
be  imported  into  Denmark,  due  account  being  taken 
of  cost  of  transport.  It  would  be  the  business  of 
the  central  distributive  guild  of  Denmark  to  learn 
where  the  commodities  required  by  the  Danes  could 
be  got  with  the  least  expenditure  of  labour.  And 
this  would  be  ascertained  with  the  greatest 
ease  from  the  statistical  records.  International 
exchange  would  be  conducted  on  exactly  the  same 
principles  as  exchange  within  any  given  country. 
For  economic  purposes  there  would  be  no  frontiers 
in  the  Moralist  union.  Land  and  industrial  capital 
would  be  international  property.  Each  guild  would 
have  an  international  office  where  all  the  statistics 
of  the  industry  would  be  kept.  The  present 
demand,    the    geographical    distribution    of    such 

189 


Economic  Moralism 

demand,  the  possibility  of  its  increase  or  its 
decrease,  or  change  of  geographical  distribution, 
would  be  recorded,  as  well  as  the  present  cost  of 
production  (that  is,  the  labour  time  required),  the 
geographical  distribution  of  the  productive  centres, 
the  possibilities  of  decreasing  the  cost,  of  changing 
the  position  of  the  productive  centres  in  order  to 
reduce  cost  of  transport.  Such  head  office  might 
be  situated  in  one  country  or  another. 

The  same  principles  and  institutions  would  serve 
when  a  greater  number  than  two  countries  were 
included  in  the  Moralist  union.  A  problem 
presents  itself  in  this  connection.  Suppose  one  of 
these  countries  to  be  very  undeveloped  (an  improb- 
able contingency  by  the  time  Economic  Moralism 
is  established),  and  the  national  production  there- 
fore costing  much  labour  owing  to  the  lack  of 
all  kinds  of  industrial  capital.  The  inhabitants 
of  that  country  would,  nevertheless,  be  supplied 
at  the  average  international  prices  with  the 
commodities  produced  by  themselves  at  such  great 
cost,  if  it  were  deemed  necessary  to  exploit  the 
new  country  either  in  the  general  interest  or  for 
the  benefit  of  certain  classes  of  consumers.  There- 
fore, the  whole  international  commonwealth,  or 
these  classes  of  consumers,  would  suffer  equally, 
and  the  imports  into  the  undeveloped  country  would 
be  heavy  to  meet  the  debt  due  to  that  country. 
It  would  consequently  be  to  the  advantage  of  all 
those  who  consumed  the  commodities  produced 
there  at  a  cost  so  much  over  the  average  of  other 
countries,  to  reduce  that  cost  by  having  the  country 

190 


Foreign  Trade  and  Protection 

developed  industrially.  How  should  the  capital 
be  raised?  We  know  how  it  is  attracted  to  such 
a  country  under  Capitalism.  The  hope  of  profit 
at  a  high  rate  attracts  it.  This  sort  of  profit - 
making  would  be  inadmissible  under  Economic 
Moralism.  iWho  would  benefit  by  the  increase 
of  industrial  capital?  It  would  be  those  who 
consume  the  commodities  produced  with  its  aid. 
Therefore,  the  capital  should  be  provided  by  them. 
If  the  savings  of  the  people  in  the  international 
Moralist  union  were  large  enough  to  flow  into 
this  field  of  investment,  the  call  upon  the  public 
for  capital  would  not  be  so  urgent.  But  if  not, 
the  increase  of  the  selling  price  of  the  commodities 
for  the  more  economical  production  of  which 
capital  is  required  would  have  to  be  greater,  and 
it  would  be  the  equitable  method.  The  founding 
of  a  colony  to  avoid  overcrowding  (which  would 
yield  no  profit  in  the  commercial  sense)  would 
have  to  be  financed  in  the  same  way. 

Now  we  have  to  consider  trade  or  exchange 
of  goods  between  Moralist  and  non-Moralist 
countries.  Over  the  economic  arrangements  of  a 
non-Moralist  country  the  United  Moralist  States 
woujd  have  no  direct  control.  The  prices  of  the 
goods  exchanged  would  be  determined  by  the 
higgling  of  the  market,  or  reciprocal  demand,  and 
not  by  the  principles  of  equity.  The  goods  that 
would  be  exchanged  would  be  those  which  could 
be  produced  in  the  one  country  and  not  in  the 
other,   or  which   could   be  produced  more  cheaply 

191 


Economic  Moralism 

in  the  one  than  in  the  other.  If  one  country  had 
a  product  which  could  only  ;be  produced  or  obtained 
there,  any  other  country  desiring  that  product 
would  be  at  a  disadvantage  in  bargaining  for  it, 
unless  it  also  had  a  product  desired  by  the  former 
country  with  equal  strength.  Merchants  in  a  11011- 
Moralist  country  placed  in  this  advantageous  posi- 
tion could  demand  a  high  monopoly  price  for  such 
a  product,  or  their  Government  could  exact  an 
export  duty.  Both  kinds  of  imposition  are 
unjustifiable  in  equity,  and  if  carried  to  an  extreme 
might  justify  a  resort  to  force  on  the  part  of  the 
countries  that  are  thus  penalized.  If  a  country 
has  certain  natural  advantages  that  are  not  shared 
to  the  same  degree  by  another  country,  it  is  placed 
in    a    similar    position   of   advantage. 

A  Moralist  State  trading  with  a  non-Moralist 
State  would  have  to  conduct  its  negotiations  largely 
according  to  the  commercial  principles  with  which 
we  are  at  present  unfortunately  too  familiar.  But 
it  would  be  in  a  peculiarly  favourable  position 
for  bargaining.  It  would  have  the  advantage  of 
bargaining  as  one  firm,  through  its  special  depart- 
ments, with  the"  competing  firms  of  its  non-Moralist 
neighbour.  Without  competition  within  its  own 
boundaries  it  would  buy  at  advantage  from  firms 
competing  with  each  other  for  its  orders,  and, 
likewise,  competing  firms  would  have  to  give  the 
highest    prices    possible    for    its    products. 

Commodities  that  it  required  and  could  only 
obtain  from  non -Moralist  States  it  would  have 
to  buy  at  their  market  price,  and  by  means  of  the 

192 


Foreign  Trade  and  Protection 

currency  accepted  in  these  States.  In  order  to  get 
that  currency,  if  it  did  not  produce  it  (suppose  it 
were  gold  and  it  had  no  gold-fields)  it  would 
have  to  sell  something  in  demand  in  the  non- 
Moralist  State  or  States.  It  would  have  to  aim 
at  getting  such  a  high  price  for  it  that  the  quantity 
of  imports  purchasable  by  the  proceeds  would  be 
greater  than  could  be  produced  by  it  with  the  same 
expenditure  of  labour.  On  the  other  hand,  the 
exchange  might  be  to  the  disadvantage  of  the 
Moralist  country.  But  it  must  not  be  forgotten 
that  as  the  Moralist  country  would  have  no  class 
drawing  rent,  interest,  and  profit,  it  would  be  able 
to  compete  in  neutral  markets  with  certain  success. 
It  would  have  the  margin  of  rent,  interest,  and 
profit   to  work  upon   in  cutting  prices. 

With  regard  to  commodities  that  might  be 
produced  at  home,  but  could  be  obtained  with 
less  expenditure  of  labour  from  non -Moralist  States 
abroad  by  exchange  of  other  home  products,  what 
would  be  the  position  of  a  Moralist  State?  If  it 
has  not  undertaken  the  production  of  such 
commodities  or  only  such  quantity  as  can  be  more 
cheaply  produced  at  home  than  purchased  abroad 
(for  instance,  wheat  from  the  best  land,  or  minerals 
from  the  high-grade  mines),  there  seems  but  slight 
ground  for  objection  to  foreign  trade  with  non- 
Moralist  States.  On  the  other  hand,  even  should  it 
be  proved  that  the  labour  expended  in  producing 
the  exports  is  less  than  that  required  to  produce 
the  kind  of  product  imported,  nevertheless,  if  it 
has  capital   and  labour  engaged  in  any  industry 

193  N 


Economic  Moralism 

the  products  of  which  are  more  expensive  than 
those  obtainable  abroad,  only  after  very  careful 
consideration  would  such  products  be  purchased 
abroad  instead  of  being  produced  at  home.  An 
important  point  for  consideration  would  be  the 
prospect  of  a  sufficient  and  constant  supply  at  a 
lower  cost  than  the  home  product.  Another  equally 
important  question  would  be  the  expense  of 
sacrificing  the  fixed  capital  invested  in  the  business, 
and  the  expense  of  training  the  workers  in  another 
department  of  industry.  These  losses  would  have 
to  be  set  against  the  computed  gain,  and  the 
problem  would  then  be  a  simple  arithmetical  one. 


194 


CHAPTER    IX 

CONDITIONS   AND   REMUNERATION 
OF   LABOUR 

Under  Economic  Moralism  the  difficulty  of  appor- 
tioning the  net  national  income  among  the  indi- 
vidual workers  in  accordance  with  the  principles 
of  justice  will  be  considerable,  but  it  will  at  least 
not  be  aggravated  by  the  necessity  of  considering 
the  claims  of  land  and  capital  for  rent,  interest, 
and  profit.  The  problems  of  the  relative  share  of 
individuals  of  different  ability  engaged  in  the  same 
occupation,  and  of  the  relative  share  of  those 
engaged  in  different  occupations,  and  of  the  share 
of  apprentices  or  novices,  as  well  as  the  question 
of  women's  remuneration,  are  in  themselves  by 
no  means  easy  to  solve,  and  so  little  attention  has 
up  till  now  been  given  to  them  that  the  immediate 
task  is  rendered  more  difficult.  Members  of  the 
civilized  portion  of  the  human  race  have  for  so 
long  been  accustomed  to  the  conditions  imposed 
upon  labour  by  the  system  of  private  ownership  of 
the  means  of  life  and  by  competition  among  the 
property-less  for  work  and  wages,  that  their  sense 
of  justice  has   been  seriously  blunted  or  left  un- 

195 


Economic  Moralism 

developed.  The  most  obviously  unjust  conditions 
are  imposed  without  compunction,  and  acquiesced 
in  without  a  murmur. 

Our  present  task  is  in  the  first  place  to  con- 
sider the  application  of  the  principle  of  justice 
to  these  problems,  and  then  the  social  and  economic 
mechanism  required  to  carry  it  into  effect.  It  is 
the  fashion  in  these  days  to  disregard  and  deride 
all  appeals  to  justice  as  if  there  were  no  such 
principle  ascertained  or  ascertainable.  But  it  exists 
in  a  more  or  less  imperfectly  developed  form  in 
the  minds  of  all.  In  ultimate  form  economic  jus- 
tice is  equal  opportunity  for  every  individual  of 
obtaining  happiness  or  pleasure  in  so  far  as  this 
can  be  secured  by  human  institutions.  Man,  as  an 
individual,  has  always  had  to  struggle  against  the 
injustice  of  Nature  and  the  more  grievous  injustice 
of  his  fellows.  The  injustice  done  by  man  origin- 
ates for  the  most  part  in  his  sense  of  the  want 
of  security  for  life  and  property  in  society  and  in 
the  overwhelming  predominance  of  his  instinct  of 
self-preservation  over  his  social  or  moral  sense 
except  in  certain  states  of  moral  exaltation,  and  a 
powerful  secondary  motive  exists  in  his  desire  to 
emulate  the  successful  in  the  battle  of  life. 
Economic  Moralism,  by  guaranteeing  security  of 
life  and  property  and  equal  opportunity  of  obtain- 
ing what  makes  life  worth  living,  will  remove  all 
fear  of  personal  injury  or  loss,  all  incentive  to 
ignoble  ambition,  the  ambition  to  triumph  regard- 
less of  others.  With  the  great  injustice  of  unearned 
income  for  the   able-bodied   removed,  along  with 

196 


Conditions  of  Labour 

the  equally  great  injustice  of  earned  income  bearing 
no  relation  to  expenditure  of  effort,  there  would 
disappear  greed,  pride  of  caste,  unworthy  emu- 
lation, and  all  the  other  evils  of  which  the  root 
is  unjust  inequality  of  income. 

Just  economic  arrangements  are  such  as  secure 
to  every  individual  an  equal  opportunity  of  acquir- 
ing equal  wealth  with  equal  effort.  This  cannot  be 
gainsaid.  There  is  no  need  to  quarrel  about  terms. 
Let  this  be  called  justice  tempered  with  mercy, 
or  charity,  or  anything  else.  Would  the  thing 
itself  be   desirable   or   not? 

How,  then,  according  to  this  principle  would 
the  net  proceeds  of  co-operative  labour  be  divided? 
Here  lies  the  world  of  industry  in  all  its  immensity 
and  complexity  with  division  of  labour  and  number- 
less kinds  of  occupations.  How  apportion  the 
places  and  the  reward  so  that  every  person  will 
be  able  to  get  equal  pleasure  in  his  work,  and  equal 
reward  with  equal   effort? 

Let  us  first  consider  the  arrangements  for 
securing  equal  pleasure  in  work.  Division  of 
labour  has  its  drawbacks,  but  it  is  not  likely  to 
be  given  up,  although  the  life  of  the  economically 
independent  man  found  in  primitive  and  economic- 
ally undeveloped  times  has  its  charms  ;  for  most 
men  prefer  to  specialize,  to  concentrate  their  energy 
on  one  occupation  ;  moreover,  it  affords  an  infinity 
of  choice,  besides  being  as  a  mere  economic  device 
most  productive.  Most  of  us  are  deluded  into 
thinking  that  we  have  freedom  of  choice  at  present. 
But  in  reality  the  few  who  exercise  it  have  only  the 

197 


Economic   Moralism 

opportunity  of  choosing  their  lifework  in  their  early 
youth,  when  they  are  unable  to  know  or  weigh 
up  the  advantages  and  disadvantages  of  it.  Under 
Economic  Moralism  it  must  be  made  easy  to  change 
one's  occupation  if  one  chooses.  Arrangements 
must  also  be  made  that  a  person  may  have  more 
than  one  occupation  if  he  should  so  desire.  Since 
the  tastes  of  individuals  differ,  we  find  in  diversity 
of  occupation,  with  the  option  of  changing  it  or 
having  more  than  one,  an  opportunity  of  securing 
for  all  equal   pleasure   in  work. 

Many  occupations  at  present  are  disag'reeable 
and  unhealthy.  All  must,  as  far  as  possible,  be 
made  equally  healthy  and  agreeable.  But  there 
will  remain  some,  such  as  mining,  which  can  never 
be  made  pleasurable  in  themselves,  and  yet  in  a 
system  of  equal  freedom  workers  will  have  to  be 
attracted  to  them,  and  not  driven  into  them.  It 
is  hardly  likely  that  a  man  in  such  a  system  would 
incarcerate  himself  for  hours  every  day  in  the  dark- 
ness and  dampness  of  a  mine,  if  he  could  get 
work  and  equal  wages  above  ground.  After  every- 
thing possible  has  been  done  to  make  all  occu- 
pations equally  healthy,  safe,  and  pleasurable, 
further  steps  may  have  to  be  taken  to  induce  a 
sufficient  number  of  workers  to  engage  in  some 
of  them.  We  know  that  the  endurance  of  danger 
and  discomfort  for  a  good  social  purpose  has  an 
attraction  for  the  nobler  sort.  But  the  community 
has  no  right  to  exploit  such  public  spirit,  and 
even  should  this  spirit  inspire  a  sufficient  number 
to   undertake    the    work,    a   proper    reward   would 

198 


Conditions  of  Labour 

have  to  be  given  in  addition  to  the  usual  conditions 
and   remuneration   of    labour.      But   the   attraction 
referred   to    has    power    over    man    mainly    in    his 
romantic   youth,    and    loses   its   force   in   later  life, 
especially   when  family  responsibilities  are  under- 
taken.    It  may  be  that  many  occupations,  such  as 
the  miner's  and  the  seaman's,  will  be  fully  manned 
by   the    youth    of   the   nation,    who    as   they   grow 
older  may  change  their  occupation.     On  the  other 
hand,  other  attractions  than  danger  and  discomfort 
.jnay  have  to   be  offered.     The  most  obvious  and 
most   feasible    is    a    higher   reward,    or,    as   would 
be  said  under  Capitalism,  higher  wages.      Indeed, 
there   seems   no    other   way   of  arriving  at  a   just 
valuation  of  services   in  different  occupations  than 
that  of  raising  or  lowering  the  reward  of  labour 
according   as   an   occupation  proves   less   or  more 
attractive  than  required.     But  there  would  be  draw- 
backs to  such  a  system,  and  these  would  have  to 
be   carefully   guarded    against.       For   instance,    it 
would  be  unwise  to  reduce  wages  in  any  occupation 
merely    because    a    very    large    number    of    inex- 
perienced youths  wished  to  enter  it.      It  would  be 
unjust  to  use  their  competition  to  beat  down  wages. 
But  if  persons  of  years  and  experience  applied  for 
situations  in  it  at  lower  wages,  a  general  reduction 
might  be  found  justifiable,  although  in  such  circum- 
stances   it    would    seem    more    just    to    allow    the 
applicants  to   compete   among   themselves   for  the 
vacant    places    without    disturbing    the    wages    of 
those  already  employed.      Of  course,   capacity  for 
an  occupation  would  have  to  be  proved  before  a 

199 


Economic  Moralism 

person  would  be  considered  an  effective  competitor. 
There  appears  no  harm  in  such  competition 
between  equals  if  it  should  be  found  necessary. 
There  is  no  doubt  that  after  the  system  has  been 
for  some  time  in  operation,  the  relative  value  of 
labour  in  different  occupations  would  be  discovered 
and  would  remain  a  steady  ratio.  Experts  in 
hygiene  would  take  into  account  the  nature  of  the 
work  and  its  effect  on  mind  and  body,  and  their 
reports  would  be  considered  when  the  rates  of 
wages  were  being  determined.  Exhausting  work 
must  be  paid  for  at  a  higher  rate  than  easy  work, 
so  that  with  equal  effort  equal  income  may  be 
earned.  On  the  other  hand,  work  that  calls  for 
great  learning  or  great  mental  ability  ought  not 
to  be  paid  for  at  a  comparatively  high  rate,  even 
should  the  workers  required  be  rather  rare.  Those 
will  devote  themselves  to  it  who  like  to  do  that 
kind  of  work.  The  scholar  or  the  scientist  would 
be  as  much  out  of  his  element  on  a  topsail  yard 
off  Cape  Horn  as  a  sailor  in  the  study  or  the 
laboratory,  perhaps  even  more  so.  The  Kelvins 
under  Economic  Moralism  will  only  be  too  glad  to 
have  a  place  found  for  them  in  which  they  can 
exercise  their  talents,  and  will  not  dream  of 
demanding  anything  extra  for  their  rare  abilities, 
especially  as  practical  equality  of  material  cir- 
cumstances will  remove  all  inducement  to  acquire 
wealth  for  social  display  as  under  Capitalism,  when 
men  of  even  the  greatest  abilities,  with  the  excep- 
tion of  the  very  few  of  rare  moral  sense,  feel 
impelled  to  surround  themselves  with  all  the  signs 

200 


Conditions  of  Labour 

of  material  success.  But  it  will  be  said  that  for 
some  occupations  the  workers  require  unusually 
expensive  education,  and  therefore  the  remuneration 
would  have  to  be  correspondingly  great.  The 
answer  is  that  this  education  would  be  given  at 
the  expense  of  the  guild  that  had  control  of  such 
department  of  industry,  and  the  cost  would  then  be 
imposed  on  the  consumer  of  the  goods  or  services 
in  the  prices  thereof.  Technical  education  would 
be  at  the  expense,  not  of  the  individual  or  of  the 
general  community,  but  of  the  consumers  who  are 
to  benefit  by  it. 

Having  considered  broadly  the  principles  that 
ought  to  regulate  the  remuneration  of  different 
kinds  of  work,  we  must  now  turn  to  the  prin- 
ciples according  to  which  persons  in  the  same 
occupation  ought  to  be  paid.  Ought  they  to  be 
paid  by  results  or  according  to  efforts?  If  by 
results,  the  method  of  determining  the  relative 
amount  would  be  very  simple.  If  one  worker 
produced  a  third  more  than  another,  he  would 
receive  a  third  more  in  wages.  The  measure 
of  value  would  have  to  be  the  social  time  neces- 
sary. If  in  any  given  trade  the  total  output  and 
the  total  time  were  ascertained,  the  average  time 
for  any  piece  of  work  could  be  calculated.  This 
is  what  would  be  charged  to  the  buyer,  and  the 
producer  would  be  paid  at  the  same  rate.  "  Piece- 
work rates  "  would  thus  be  paid,  when  the  kind 
of  work  was  suitable,  there  being  some  kinds  for 
which  only  time  wages  would  be  practicable.     An 

201 


Economic  Moralism 

exceptionally  clever  worker  would  therefore  earn 
more  than  his  fellow- workers  in  a  given  time. 
But  in  that  case  the  maxim  "  equal  reward  for 
equal  effort  "  would  be  nullified,  for  cleverness 
implies  ability  to  do  more  than  another  with  the 
same  effort.  Cleverness,  whether  of  head  or  hand, 
like  its  opposite,  ineptitude,  is  one  of  the  many 
injustices  of  Nature.  The  clever  man  with  a 
properly  developed  moral  sense  will  feel  it  to  be 
his  duty,  and  his  privilege  and  pleasure,  to  help 
his  fellow-workers  who  are  not  gifted  with  his 
powers.  The  Founder  of  the  Christian  religion  took 
this  view.  But  many  modern  Christians  hold  that 
the  clever  or  strong  man  must  be  left  free  to  give 
or  withhold  assistance,  and  consequently  object  to 
any  system  that  would  not  leave  him  a  free  agent. 
They  approve  of  letting:  the  acquisitive  side  of 
man's  nature  have  full  and  unrestrained  play,  and 
of  leaving  to  the  successful  the  option  of  keeping 
his  gains  or  of  alleviating  the  sufferings  of  those 
worsted  in  the  struggle  with  him.  Most  of  these 
persons  take  up  this  position  because  at  heart 
they  really  disapprove  of  equality  and  fraternity, 
except  in  vaguest  theory.  And  if  we  ascribe  the 
best  motives  to  them,  we  can  only  conclude  that  in 
desiring  the  individual  to  be  left  free  in  this  matter, 
they  sacrifice  unwittingly  an  important  moral  prin- 
ciple to  a  peculiarly  individualistic  and  objection- 
able view  of  spiritual  development.  However,  if  a 
"  clever  "  man  refuse  to  acquiesce  in  the  com- 
pulsory application  of  this  ethical  principle,  he 
cannot  logically  object  if  his  fellows  refuse  to  act 

202 


Conditions  of  Labour 

on  ethical  principles  in  dealing  with  him,  and  the 
cleverest  would  be  a  helpless  creature  in  such  case. 
The  able  man  will  not,  cannot  do  less  or  inferior 
work,  even  if  he  does  not  get  more  than  the  average 
remuneration  for  it.  It  is  more  pleasurable  to 
work  in  the  manner  that  comes  natural  to  him,  and 
marks  him  as  a  superior  worker.  But  there  is  a 
serious  objection  to  what  seems  a  perfectly  just 
arrangement.  If  the  able  are  to  be  paid  accord- 
ing to  efforts  and  not  by  results,  what  about  the 
incapable?  Are  all  those  who  are  under  the  average 
to  be  put  on  the  same  footing?  Is  it  possible  to 
distinguish  those  who  take  as  much  pains  with  their 
work  as  the  able,  and  yet  are  inferior,  from  those 
who  are  lazy,  or  careless,  or  indifferent?  If  all  did 
their  work  with  equal  care  and  diligence,  time 
rates  would  be  the  equitable  method  of  payment. 
But  some  will  not  put  energy  or  intelligence  into 
their  work.  It  is  true  that  laziness  or  careless- 
ness is  due  to  imperfection  of  character  inherent 
in  the  individual,  and  that  consequently  allow- 
ance should  be  made.  It  is  perfectly  true  that 
justice  enjoins  assistance  in  such  cases  just  as  much 
as  when  the  individual  strives  hard  and  yet,  owing 
to  some  other  mental  or  physical  weakness,  is 
not  able  to  carry  into  effect  what  he  so  earnestly 
strives  to  do.  But  laziness  and  carelessness  can  in 
most  cases  be  cured,  and  in  no  other  way  than 
by  letting  the  lazy  and  the  careless  take  the  con- 
sequences of  their  imperfections.  In  the  absence 
of  this  restraining  influence  man  is  prone  to 
degenerate,     and     it     is     desirable     to     maintain 

203 


Economic  Moralism 

efficiency.  If  efficiency  could  be  maintained  by 
appealing  to  the  sense  of  honour  or  duty,  or  by 
stirring  up  the  desire  to  emulate,  so  much  the 
better,  and  it  is  to  be  hoped  that  before  long  this 
method  alone  will  prove  sufficient.  But  at  present 
the  appeal  to  self-interest  is  most  effective.  There 
is  another  reason  for  allowing  every  one  to  bear  his 
burden  of  incompetence  or  laziness,  and  it  is  that 
many  workers,  by  no  means  lazy,  like  to  linger 
over  their  work  for  the  pleasure  of  it.  Workers  of 
this  kind  would  have  to  be  paid  by  piecework. 
Moreover,  in  a  social  system  in  which  the  great 
injustice  of  rent,  interest,  and  profit  is  abolished, 
the  injustice  of  inequality  of  remuneration,  owing 
to  inequality  of  ability,  would  be  trifling.  All 
things  considered,  therefore,  it  seems  desirable  to 
remunerate  labour  according  to  its  results,  but  it 
seems  more  in  consonance  with  justice  to  let  this 
rule  apply  only  to  those  below  the  average  except 
in  the  case  of  the  old,  and  to  leave  those  who  are 
thus  found  to  be  clearly  incapable  of  good  work 
in  the  occupation  they  have  chosen,  to  pass  over 
to  other  work  more  suited  to  their  capacities,  and 
of  course  equally  useful  to  society,  ,for  all  socially 
necessary  work  is  equally  useful  and  honourable. 
Those  above  the  average  would  have  no  reason 
to  complain  if  remunerated  on  the  basis  of  time 
instead  of  piecework. 

When  the  payment  of  novices  is  considered,  there 
must  be  taken  into  account,  not  only  the  value  of  the 
novice  as  a  producer,  but  the  cost  of  his  technical 

204 


Conditions  of  Labour 

education.  There  will  be  two  classes  of  novices, 
adults  and  minors.  There  are  many  kinds  of 
necessary  work  which  the  young  can  do  as  well 
as  adults,  and  some  which  they  can  do  better. 
The  young  should  be  utilized  in  economic  functions 
as  early  in  life  as  possible,  and  on  tasks  suited  to 
their  capacities.  This  is  not  the  place  to  discuss 
the  proper  age  at  which  a  young  person  ought 
to  be  set  to  work.  Suffice  it  to  say  that  in  all 
probability  our  ideas  of  education  will  materially 
alter.  There  is  no  doubt  that  at  present  the  young 
are  crammed  with  shreds  and  cuttings  of  know- 
ledge, instead  of  being  offered  a  systematic 
education  which  could  be  acquired  much  more 
easily  and  profitably  and  pleasurably  later  in  life. 
•We  are  too  ambitious  for  the  young,  and  are 
in  too  great  a  hurry  to  "  finish  "  their  education. 
It  is  all  done  with  the  best  intention.  It  is  done 
with  the  view  of  equipping  them  early  for  the 
competitive  life  before  them,  and  especially  for 
the  competitive  examinations  which  lead  on  to  an 
assured  position.  Under  Economic  Moralism  there 
will  be  no  need  for  such  feverish  hurry.  Conse- 
quently the  young  will  be  set  to  useful  work  early 
in  life,  and  this  work  will  discipline  them!  and 
strengthen  them  in  mind  and  body.  It  will  be 
light  and  pleasurable,  and  as  the  hours  will  be 
short,  there  will  be  ample  time  for  general 
education  and  play  besides.  How  early  they  will 
be  set  to  work  does  not  concern  us  here,  but  it 
is  within  the  scope  of  this  essay  to  discuss  the 
principle    upon    which    the    labour    of    the    young 

205 


Economic  Moralism 

should  be  remunerated.  As  has  already  been  said, 
the  labour  of  the  young  must  be  utilized  to 
the  best  advantage.  Consequently  the  situations 
suitable  for  them  ought  to  be  left  for  them  alone, 
and  they  ought  to  be  paid  for  the  time  socially 
necessary  for  the  work,  just  in  the  same  way  as 
adult  and  experienced  workers.  Their  time  should 
be  considered  as  having  the  same  exchange  value 
as  that  of  adults.  Further,  they  ought  to  be  paid 
for  the  time  they  have  to  expend  in  acquiring  such 
technical  education  as  may  be  deemed  necessary 
by  the  guild  to  which  they  are  attached.  The  cost 
of  the  learner's  time,  and  that  of  his  education — 
i.e.,  time  of  teacher,  cost  of  books,  apparatus, 
etc. — will  be  borne  by  the  guild  and  charged  to 
the  consumers  of  the  guild's  products  or  services. 
Instead  therefore  of  receiving  as  at  present  a  small 
fraction  of  an  adult's  pay,  the  young  learner  under 
Economic  Moralism  will  get  full  pay,  to  which 
he  is  justly  entitled.  But  for  want  of  experience 
he  will  not  be  qualified  to  spend  wisely,  and  there- 
fore the  State  and  his  parents  or  guardians  will 
supervise  his  expenditure.  Against  his  income  must 
be  placed  the  cost  of  his  food  and  clothing 
according  to  standard,  and  payment  for  lodging 
and  domestic  attendance.  After  a  reasonable 
amount  for  amusement,  travelling,  sports,  scien- 
tific or  scholarly  pursuits,  etc.,  which  would  be 
the  same  for  every  one  unless  there  were  special 
reasons  for  making  an  exception,  the  balance  would 
accumulate  in  the  State  bank  for  the  youth,  and 
would  be  available  for  the  purchase  of  house  and 

206 


Conditions  of  Labour 

furniture   or   anything   else  on   which  he  chose  to 
spend  it  after  reaching  his  majority. 

If  the  guild  bears  the  expense  of  technical 
education,  as  it  ought  to  do,  the  person  taught 
should  in  justice  continue  during  his  working  days 
to  do  the  work  of  the  guild.  But  in  this  way  his 
liberty  would  be  restricted,  and  as  we  have  seen, 
the  right  to  change  one's  occupation  must  be 
accorded  the  individual.  It  would  not  be  just 
if  every  one  were  allowed  to  change  his  occupation 
at  will,  and  leave  the  expense  of  his  technical 
education  and  of  his  ineffective  work  to  be  borne 
by  the  community  or  sections  of  it.  A  person 
should  be  allowed  to  change  only  after  he  has 
repaid  such  expense  to  the  guild  he  is  leaving. 
If  the  sum  were  a  large  one,  it  would  be  a  serious 
matter,  and  if  the  individual  had  made  a  mistake 
in  choosing  his  occupation  and  were  not  actuated 
by  a  light-headed  desire  for  change,  it  would  be 
an  accident,  the  effects  of  which  he  should  if 
possible  be  helped  to  bear  by  his  fellows.  The 
difficulty  here  is  to  discriminate  between  the  serious 
and  the  frivolous.  The  most  feasible  way,  it 
would  seem,  is  to  lighten  the  cost  by  a  system  of 
insurance  against  part  of  it,  but  it  would  be 
necessary  to  leave  a  considerable  part  to  be  borne 
by  the  individual  concerned,  so  that  it  would  act 
as  a  deterrent  in  cases  where  the  individual  might 
not  have  reasonable  grounds  for  his  belief  that 
he  would  avoid  in  the  new  occupation  the  evils  he 
sought  to  avoid  in  his  previous  occupation.  The 
person  who  had  made  an  unfortunate  choice  would 

207 


Economic  Moralism 

thus  have  to  bear  a  large  part  of  the  burden 
himself,  instead  of  having  it  shared  with  the  rest 
of  the  community.  The  maxim  that  people  must 
bear  one  another's  burdens  is  set  aside  in  this  case, 
because  of  the  necessity  of  preventing  the  degen- 
eration that  would  set  in  if  people  were  allowed 
with  impunity  to  act  unsocially,  and  also  because 
it  would  be  impossible  to  discriminate  in  the 
matter.  : 

But  the  hardship  would  not  be  very  great.  In 
many,  perhaps  in  most,  occupations  novices  would 
advance  from  simple  to  difficult  work  by  easy 
stages  with  the  expenditure  of  but  little  special 
training.  As  it  would  be  easy  to  pay  the  whole 
or  the  greater  part  of  this  expense,  young  persons 
with  no  strong  predilections  or  marked  aptitudes 
would  choose  such  occupations  at  the  outset  of 
their  career,  and  would  avoid  the  occupations  that 
required  an  expensive  training  until  they  were  sure 
they  could  take  pleasure  in  them  for  life. 

Every  guild  would  know  the  work  required  of 
it,  for  it  would  be  determined  by  the  wants  of 
all.  But  while  this  would  mean  full  employment 
for  all  in  society  as  a  whole,  the  number  required 
in  each  department  of  industry  would  be  strictly 
limited.  Therefore  novices  would  only  be  accepted 
as  vacancies  occurred,  and  in  case  of  competition 
a  test  would  be  used  for  the  purpose  of  ascertaining 
the  fittest  for  the  work. 

In  connection  with  this  question  is  to  be 
considered  the  case  of  persons  ready  to  sacrifice 
to  a  certain  extent  their  material  wants  for  higher 

208 


Conditions  of  Labour 

purposes,  say  poets,  scholars,  artists,  scientists, 
engaged  on  private  and  probably,  in  the  commercial 
sense,  unremunerative  work.  These  would  wish 
perhaps  to  work  shorter  time  in  their  ordinary 
vocations  than  the  average  person,  and  the  cost 
of  their  training  would  therefore  bear  a  larger 
proportion  to  their  output.  The  loss  of  this  to  any 
guild  as  well  as  the  loss  in  the  case  of  early 
death  could  be  distributed  by  a  system  of  insurance, 
but  the  guilds  would  be  large  and  national,  and 
the  average  in  each  guild  would  be  practically 
the  national  one.  In  the  case  of  those  guilds  for 
which  a  very  expensive  preliminary  training  is 
required,  a  minimum  service  might  in  justice  have 
to  be  insisted  on.  But  against  these  short -time 
workers  there  would  be  long-time  workers  who 
would  be  glad  to  take  up  the  time  vacated.  What- 
ever arrangement  might  be  made  to  secure  justice 
in  this  matter,  there  would  be  no  question  of  a 
normal  working  day  applying  to  all  workers.  The 
greatest  possible  liberty  must  be  accorded  the 
individual  as  to  the  length  of  his  working  day, 
in  so  far  as  industrial  arrangements  can  be  made 
to  prevent  irregularity  from  interfering  with 
efficiency. 

Then  as  to  payment  of  women  workers.  They 
would  be  treated  exactly  as  the  other  sex.  Some 
occupations  would  prove  to  be  very  suitable  for 
women,  although  all  would  be  open  to  them,  if 
they  could  prove  themselves  fit  for  them.  A 
woman's  time  would  count  for  as  much  as  a  man's, 

209  O 


Economic  Moralism 

just  as  a  minor's  would  count  for  as  much  as  an 
adult's,  even  if  the  woman  were  unable  to  do 
as  much  or  as  good  work  as  the  man  in  the 
same  time.  It  has  been  by  no  means  proved 
that  the  female  sex  is  inferior  economically  to  the 
male  sex.  Each  has  its  special  qualifications.  But 
even  if  it  were  inferior,  it  would  have  to  be  helped 
by  the  male  sex  to  bear  its  burden  of  inferiority. 
Therefore  it  would  be  possible  for  every  woman 
to  earn  as  much  as  a  man  in  any  given  time. 
They  would  be  economic  equals.  The  beneficial 
consequences  would  be  great.  In  the  case  of 
marriage  the  wife  might  continue  at  her  post  in 
the  industrial  world,  although  she  might  have  to 
withdraw  for  a  season.  The  loss  of  income  in 
such  cases  would  have  to  be  borne  by  herself 
and  her  husband  equally.  She  would  contribute 
along  with  her  husband  to  the  household  expenses. 
The  household  work  could  be  done  by  the  guild 
whose  work  this  would  be,  and  both  husband  and 
wife  could  contribute  equally,  or  if  they  decided 
that  the  wife  should  remain  at  home  and  do  all  or 
part  of  the  work,  she  would  have  to  receive  payment 
from  her  husband,  the  amount  to  be  determined 
according  to  the  principles  just  expounded.  The 
married  couple  in  this  case  would  have  to  live 
on  one  income,  or  in  the  other  case  if  both  were 
engaged  in  industry,  and  employed  a  person  for 
the  same  time  in  their  domestic  affairs,  they  would 
each  have  to  pay  that  person  a  half  of  their  income, 
so  that  again  they  would  be  living  on  the  equivalent 
of  one  income. 

2IO 


Conditions  of  Labour 

With  regard  to  invention  and  authorship,  Herbert 
Spencer  holds  that  one  who  has  elaborated  a  mental 
product  is  defrauded  if  others  use  it  without  giving 
him  the  benefit  for  which  he  worked,  and  that 
without  aggressing  upon  any  one  he  may  impose 
his  own  terms.  Here,  again,  as  we  saw  in  a 
previous  chapter,  Spencer  makes  no  attempt  to 
ascertain  the  "  true  equivalent  "  for  the  labour  of 
the  artist  or  author.  In  a  social  system  like  the 
present,  relative  ethics  permits  the  individual  to 
make  the  best  possible  bargain  for  himself  and 
to  acquire  as  much  material  wealth  as  possible, 
because,  owing  to  the  insecurity  of  economic  posi- 
tion, it  is  impossible  to  say  when  one  has  enough 
to  cover  all  unforeseen  losses  and  still  afford  a 
sufficiency  for  maintenance.  It  is  this  uncertainty 
that  is  responsible  for  the  money-making  propen- 
sities and  the  otherwise  unaccountable  selfishness 
of  men  and  women  of  even  high  moral  character. 
The  artist,  or  thinker,  as  such,  if  relieved  of  anxiety 
for  the  material  wants  of  his  family  and  himself, 
would  have  no  incentive  in  his  own  nature  to  insist 
on  the  highest  possible  prices  for  his  work.  The 
true  artist  and  the  true  thinker  desire  above  all 
things  to  give  full  play  to  their  faculties  and  to 
express  themselves  to  their  fellows.  Spencer  seems 
to  think  that  their  work  should  have  its  exchange 
value  determined  in  a  different  way  from  any  other 
work.  While  considering  that  the  greatest  sum 
obtainable  would  be  the  "  true  equivalent,"  he  indi- 
cates that  this  would  be  naturally  based  on  the 
use-value   of  the   work,    and   not  on   the   cost   of 

211 


Economic   Moralism 

production.  But  he  does  not  show  why  such  work 
should  be  placed  on  a  different  footing  from  other 
work.  In  equity  an  author  or  inventor  has  only 
a  right  to  the  cost  of  production  of  his  work,  and 
in  a  normal  social  system  he  will  not  desire  any- 
thing more.  This  could  be  ascertained  with 
considerable  accuracy.  In  such  conditions,  too,  it 
seems  probable  that  such  work  will  be  done  as  a 
recreation,  as  a  pastime,  after  the  ordinary  work 
of  the  day  is  over,  and  be  given  to  the  world 
without  charge.  An  author  or  inventor  would, 
however,  be  entitled  to  be  guaranteed  security  from 
the  exploitation  of  his  work  without  payment. 

There  is  now  the  question  of  discipline  and 
organization  within  the  guild.  How  would  the 
affairs  of  a  guild  be  managed?  Who  would 
manage  them?  To  what  extent  would  one  indi- 
vidual be  allowed  to  dominate  others  or  be 
dominated  by  them?  Would  powers  be  extended 
to  individuals  or  to  committees?  And  would  they 
be  appointed  from  above  or  elected  from  below? 
Would  the  organization  be  hierarchical  or  demo- 
cratic? How  would  disputes  be  settled?  Would 
there  be  any  danger  of  strikes?  And  how  would 
the  right  to  work  be  established  on  a  firm  basis? 

It  is  self-evident  that  persons  of  ability  and 
experience  must  instruct  and  direct  less  able  and 
less  experienced  workers.  Foremen,  heads  of 
departments,  and  managers  have  certain  co- 
ordinating functions  that  distinguish  them  from 
the  ordinary  workers.     Very  often  their  work  is  not 

212 


Conditions  of  Labour 

more  difficult  but  merely  different  ;  and  sometimes 
it  is  easier  ;  some  are  especially  fitted  for  it.  How 
would  these  officials  be  appointed?  At  present 
they  are  appointed  from  above — that  is,  by  a  higher 
co-ordinating  functionary.  But  even  now  this 
higher  power  has  frequently  to  consult  those  on 
what  is  considered  a  "  lower  "  plane  as  to  the 
suitability  of  the  candidates.  In  the  future  those 
best  able  to  judge  of  a  person's  suitability  will 
have  to  make  the  appointment,  and  there  is  no 
need  to  dogmatize  now  as  to  who  these  would  be — 
experience  will  show.  But  there  will  then  be  no 
pecuniary  attraction  to  encourage  competition  for 
such  positions.  Owing  to  equality  of  payment  and 
conditions,  the  greedy,  pushful,  showy,  and  super- 
ficial will  have  no  inducement,  as  they  have  now, 
to  elbow  their  way  into  places  for  which  they  are 
not  really  fit,  and  this  would  tend  to  efficiency. 
Candidates  would  have  no  other  motive  but  their 
feeling  of  fitness  and  their  love  of  the  work.  Their 
appointment  might  safely  be  left  to  their  fellow- 
workers,  to  those  who  come  into  close  contact  with 
them  and  therefore  know  their  worth.  There  would 
probably  be  no  temptation  to  elect  a  foreman  or 
a  manager  likely  to  allow  laxity  of  discipline, 
because  a  standard  of  excellence  would  be  insisted 
on  in  the  last  instance  by  the  distributive  guild, 
and  if  the  products  of  any  factory  or  workshop 
were  below  the  standard  in  quality  or  over  it  in 
cost,  all  workers  responsible  for  bad  workman- 
ship would  perforce  have  their  remuneration 
reduced    by    the    central    offices    of    their    guild. 

213 


Economic  Moralism 

Appeal  to  properly  constituted  courts  against  any 
unjust  dealings  would  necessarily  be  allowed. 
Such  officials  after  being  chosen  must  be  accorded 
obedience,  and  be  allowed  to  exercise  disciplinary, 
powers.  But  if  they  should  prove  incapable,  they 
would  be  proceeded  against.  Every  factory  and 
workshop  would  require  to  have  a  corporate  life 
and  autonomy.  Therefore  a  council  of  all  the  older 
workers,  in  number  forming  the  majority  of  the 
total  workers,  would  require  to  have  certain 
important  powers.  Complaints  could  be  carried 
if  necessary  to  such  a  body,  who  would  have  the 
power  to  appoint  a  committee  to  investigate  and 
report.  Appeal  could  be  made  to  higher  courts  in 
the  guild  itself,  and  finally  to  the  national  law- 
courts.  Officials  appointed  in  this  democratic  way 
would  have  to  be  obeyed  until  they  were  proceeded 
against  and  deposed  in  a  constitutional  way. 
Factories  and  workshops  and  all  industrial  bodies 
would  appoint  delegates  to  the  higher  courts  of 
the  guild  to  which  they  belong,  and  it  would  be 
open  to  any  person  to  have  a  complaint  against 
any  other  person  or  persons  in  the  guild  investi- 
gated and  adjudicated  upon.  A  workshop  would 
therefore  be  managed  by  those  considered  by  their 
fellow-workers  to  be  the  most  capable,  who  would, 
however,  be  liable  to  removal  in  certain  contin- 
gencies. 

As  to  strikes,  they  would  be  almost  unthinkable. 
At  present  the  workers  know  that  the  fruits  of 
their  labour  are  taken  by  their  masters,  that  they, 
the  workers,  produce  unearned  income  for  others. 
Thus   antagonism   exists.      Strikes  are   the   result. 

214 


J 


Conditions  of  Labour 

But  when  all  the  produce  of  labour  is  returned  to 
the  workers,  when  work  is  valued  by,  the  average 
time  required  to  do  it,  every  one  would  know  that 
he  would  get  full  credit  for  the  work  actually  done 
by  him.  What  would  there  be  to  strike  for? 
Wealth  would  be  automatically  distributed  accord- 
ing to  scientifically  ascertained  and  universally 
accepted  principles.  Every  kind  of  work  would 
be  valued  according'  to  the  social  time  required  for 
it,  and  the  worker  would  be  paid  accordingly. 
Conditions  of  labour  in  any  department  would  be 
the  same  everywhere.  The  law-courts  of  the  land 
in  the  last  resort  would  insist  on  this.  There  might 
be  room  for  dispute  with  regard  to  the  wages 
and  conditions  of  labour  in  one  industry  compared 
with  those  of  another.  But  here  again  properly 
constituted  courts  would  consider  alleged  differ- 
ences and  give  their  decision.  With  the  abolition 
of  classes  and  the  existence  of  the  sentiment  of 
equality,  with  the  fullest  public  consideration  of 
all  grievances,  strikes  would  be  very  seldom 
called  for. 

As  to  the  right  to  work,  the  wants  of  every 
individual  create  a  demand  for  the  labour  of  others, 
and  require  an  equivalent  of  labour  from  that 
individual.  There  is  therefore  room  for  every 
one  to  work  as  long1  as  he  pleases,  so  long  as  the 
material  means  of  existence  are  sufficient.  Vacan- 
cies will  always  be  occurring  in  every  industry,  and 
if  the  population  increases,  so  will  the  workers 
be  necessarily  increased  in  every  industry.  With 
proper  organization  there  can  be  no  lack  of  work 
for  all. 

215 


CHAPTER   X 

NATIONAL  INSURANCE 

INVALIDITY,  OLD  AGE,   DEATH,  FIRE,   etc. 

The  economic  loss  resulting  to  the  individual  or 
his  family  from  invalidity,  old  age,  death,  fire, 
etc.,  must  under  Economic  Moralism  be  borne  by 
the  community.  This  is  a  deduction  from  the 
Christian  precept  that  we  should  bear  one  another's 
burdens.  The  corresponding  principle  of  absolute 
ethics  is  that  the  consequences  of  accidents,  and 
of  personal  infirmities  incurable  by  economic  or 
other  social  pressure,  must  in  iso  far  as  they  result 
in  a  pecuniary  loss,  and  as  far  as  possible  in  other 
respects,  be  borne  by  the  community.  In  other 
words,  such  loss  is  to  be  covered  by  the  premium 
paid  by  every  able-bodied  individual  for  insurance 
against  the  risks  common  to  all.  This  is  not 
charity,  but  a  business  proposition,  to  use  an 
Americanism.  The  strong  must  help  the  weak,  in  so 
far  as  such  assistance  does  not  demoralize,  but 
in  this  case  it  is  in  a  sense  self-help,  the  strong 
adopting  the  most  economical  way  of  preserving 
themselves    from    possible    dangers.       It    has    its 

216 


National  Insurance 

ethical  basis  on  the  principle  formulated  by  Spencer 
that  the  harsh  discipline  of  Nature  must  have  its 
results  modified  where  this  may  be  done  without 
appreciably  interfering  with  the  further  progress 
of  evolution  ;  but,  after  all,  on  lower  grounds 
it  is  simply  a  common -sense  arrangement  for  self- 
preservation. 

A  distinction  may  with  advantage  be  drawn 
between  taxation  and  insurance,  the  two  modes  in 
which  such  assistance  can  be  financed.  Although, 
broadly  considered,  compulsory  insurance  is  simply 
a  form  of  taxation,  the  term  "  Taxation  "  may 
in  a  stricter  sense  be  applied  to  the  system  of 
collecting  the  cost  of  necessary  communistic 
undertakings,  such  as  national  defence,  public 
drainage,  etc.,  which  are  of  present  value  to  every 
one,  and  the  term  "  Insurance  "  to  the  system  of 
collecting  the  premiums  against  certain  risks  or 
contingencies,  such  as  invalidity,  premature  death, 
etc.  The  one  is  for  a  certain  service  or  advantage, 
the  other  for  a  problematical  one.  Let  us 
consider  the  question  of  Insurance  now,  reserving 
Taxation  for  the  next  chapter. 

As  regards  Invalidity,  in  a  certain  sense  this 
term  might  be  held  to  cover  inferior  working 
ability  of  the  individual  due  to  physical  or  mental 
weakness  at  any  period  of  life,  but  such  economic 
inferiority  is  covered  by  the  principles  of  remunera- 
tion fully  dealt  with  in  the  preceding  chapter,  and 
"  Invalidity  "  will  therefore  stand  as  the  technical 
term  for  the  temporary  or  permanent  cessation 
of  the  ability  to  work.     In  such  a  case  the  victim 

217 


Economic  Moralism 

must  be  relieved  by  all  the  more  fortunate  members 
of  the  community  and  to  the  greatest  extent 
possible,  this  measure  being  supported,  not  merely 
out  of  compassion,  but  for  the  self-preservation 
of  the  able-bodied  themselves,  because  no  one, 
not  even  the  strongest  and  healthiest,  is  exempt 
from  such  risks.  All  illness,  whether  arising  from 
disease  or  accident,  must  therefore  be  dealt  with 
by  a  scheme  of  national  insurance.  And  it  seems 
only  equitable  that  the  victim  should  receive  an 
income  from  the  State  at  the  same  rate  as  that 
which  he  or  she  has  been  making  during  the 
preceding  year,  or  not  less  than  the  average  annual 
income  in  the  community.  A  premium  or  tax 
in  proportion  to  income  would  be  deducted  from 
wages,  or  a  poll-tax  levied  sufficient  for  the 
average  income.  Although  the  income  could  not, 
perhaps,  be  spent  altogether  in  the  same  way, 
it  may  be  spent  in  another  in  compensation.  Into 
the  question  of  the  safeguards  required  against 
malingerers,  it  is  not  necessary  to  inquire  in  this 
place.     These  are  easily  enough  devised. 

All  medical  assistance  and  requisites  would  be 
free,  and  the  cost  raised  by  a  poll-tax.  For 
hospitals  and  all  medical  treatment  and  advice 
the  nation  must  be  responsible.  The  individual 
must  be  safeguarded  by  the  whole  power  of  the 
community  against  the  ills  flesh  is  heir  to.  The 
main  object  of  the  medical  service  will  be  to 
prevent  disease.  Its  motto  will  be  changed  to 
"  Prevention  is  better  than  cure."  But  it  will 
have  only  advisory  powers  except  when  authorized 

218 


National  Insurance 

by  the  State.      It  must  by  no  means  be  allowed 
to   erect   itself   into   a   tyrannical   priesthood. 

As  a  national  service  the  medical  profession 
could  do  more  effective  work  than  on  its  present 
individualistic  basis,  because  the  individual 
members  of  it  would  receive  a  better  training, 
their  work  would  be  better  distributed,  they  would 
have  time  for  study,  they  would  be  relieved  of 
worry  about  income,  the  commercial  side  of  their 
profession  would  no  longer  harass  them.  The 
whole  cost  of  their  education  would  be  borne  by 
the  State.  Those  who  desired  to  enter  the  pro- 
fession and  who  proved  themselves  on  examination 
to  be  fitted  for  entrance  would  at  once  be  set  to 
their  studies  and  receive  salary.  Should  any  of 
these  be  afterwards  found  to  be  inefficient  or 
incapable,  even  after  their  class  work  was  over, 
they  would  be  forced  to  leave  the  profession  and 
devote  themselves  to  other  work  suited  to  their 
abilities.  The  utmost  care  would  be  taken  in  this 
profession,  above  all  other  professions  or  trades, 
to  weed  out  the  incompetent.  The  inexperienced 
medical  man  would  probably  be  attached  to  a 
district  where  he  would  work  under  superior 
officers.  He  would  accompany  more  experienced 
men,  and  would  not  be  allowed  to  gain  experience 
by  experimenting  on  his  patients.  Even  after 
having  acquired  sufficient  experience  he  would  have 
to  report  serious  cases  to  headquarters,  and  in 
the  case  of  the  slightest  doubt  call  in  the  assistance 
of  more  experienced  colleagues.  After  gaining 
a  wide  general  experience,  doctors  would  specialize, 

219 


Economic  Moralism 

and  the  very  best  skill  would  therefore  be  available 
for  every  one  who  required  it.  The  simpler  cases 
would  be  left  in  the  hands  of  the  younger  men, 
while  to  serious  cases  the  older  men  would  devote 
the  greater  part  of  their  attention.  A  sufficient 
number  of  medical  men  would  have  to  be  employed 
to  enable  every  one  of  them  to  have  time,  not  only 
to  continue  his  studies  all  his  life  through,  but  to 
allow  him  sufficient  relaxation.  Qne  of  the  chief 
duties  of  the  profession  would  be  to  educate  the 
public  in  the  laws  of  health  and  to  popularize 
medical  truths  and  theories.  All  scientific  research 
and  experimental  work  would  have  to  be  carried 
on  by  experts  at  the  national  expense.  But  all 
expenditure  thereon  would  have  to  be  under  proper 
public  control. 

The  proposals  for  invalidity  do  not  quite  apply 
to  the  provision  in  entirety  for  old  age.  Such 
provision  must  be  divided  into  two  kinds.  There 
is  the  kind  required  if  the  individual  is  to  retire 
before  he  is  entirely  unfit  for  work,  and  the  other 
kind  if  the  individual  is  to  work  until  he  is  no 
longer  able  to  do  so.  There  is  the  greatest 
diversity  of  opinion  as  to  old  age  pensions. 
Bellamy  pensions  off  everybody  in  his  Utopia  at 
the  age  of  45.  Other  Socialists  fix  the  age  at  50, 
55,  or  60.  Liberals  make  it  65  or  70.  More- 
over, those  in  favour  of  State  pensions  disagree 
about  the  amount  of  the  allowance.  It  varies 
from  5s.  a  week  to  the  handsome  pension  of  a 
Cabinet  minister.      No   attempt   is  made  to   base 

220 


National  Insurance 

the  practice  on  principle.  What  is  the  principle 
as  deducible  from  Absolute  Ethics?  The  evil  to 
be  insured  against  is  the  inability  of  the  individual 
to  work  as  efficiently  in  his  old  age  as  in  his 
younger  days.  The  time  when  a  person's  powers 
begin  to  wane  varies  with  the  individual.  If  a 
person  breaks  down  at  a  comparatively  early  age, 
he  is  the  victim  of  misfortune,  and  is  entitled  to 
assistance,  while  an  older  but  perfectly  fit  man 
is  not.  Provision  of  this  sort  for  old  age  will  be 
dealt  with,  exactly  as  similar  cases  earlier  in  life 
are  dealt  with,  as  under  invalidity  or  under 
incapacity,  as  shown  in  the  previous  chapter. 

But  such  provision  is  altogether  different  from 
what  is  known  as  a  pension.  A  pension  is  payable 
at  a  certain  age  whether  the  pensioner  is  fit  or 
unfit  for  his  usual  work.  But  a  person  fit  for 
work  has  no  claim  on  the  community  for  assistance. 
Therefore,  State  pensions  raised  by  compulsory 
taxation  would  have  no  justification  under 
Economic  Moralism.  But  there  is  no  reason  why 
there  should  not  be  voluntary  insurance  for 
pensions  or  annuities  at  various  ages  as  the  insurer 
may  elect,  just  as  under  Capitalism.  This  in  many 
cases  would  be  preferred  to  individual  saving  for 
the  same  purpose.  It  is  a  clear  gain  to  every  one 
to  be  able  to  insure  for  such  a  pension  by  paying 
a  small  periodical  premium  throughout  the  greater 
part  of  his  life,  instead  of  saving  a  necessarily 
very  much  larger  portion  of  his  income  which  he 
may  never  be  in  a  position  to  enjoy.  The  State 
actuaries   could    arrange    the    premiums    according 

221 


Economic  Moralism 

to  the  insurance  tables.  And  this  would  settle  the 
disputes  regarding  the  age  at  which  pensions  should 
be  granted  and  the  amount  of  these.  The  indi- 
vidual himself  would  make  the  choice  as  regards 
both  age  and  amount.  The  State  actuaries  would 
make  in  every  case  of  such  voluntary  insurance 
an  allowance  for  the  sum  the  individual  might 
according  to  the  law  of  averages  be  entitled  to 
from  the  State  in  the  form  of  an  allowance  on 
ineffective  work  or  for  total  invalidity  if  he  had 
not  insured  for  a  pension.  And  the  State  would 
be  responsible  for  such  contribution.  But  that 
would  be  the  extent  to  which  an  old  age  pension 
under  Economic  Moralism  would  receive  any 
contribution  from  the  funds  of  the  State,  and  the 
charge  would  be  against  the  guild  or  guilds  of 
which  the  individual  was  a  member.  On  the  other 
hand,  the  individual  could,  if  he  chose,  save  the 
money  for  his  old  age  instead  of  insuring. 

It  would  not  be  necessary  for  the  State  to  insist 
on  every  one  making  provision  for  an  old  age 
pension.  .With  the  right  to  work  every  one  could 
earn  an  income  as  long  as  he  was  fit  for  work, 
and  for  inability  to  work  he  would  be  covered 
by  his  State  insurance. 

As  regards  insurance  against  death,  would  this 
be  compulsory,  or  optional,  or  would  it  be 
prohibited?  It  would  be  compulsory  on  parents 
of  children  not  self-supporting,  and  for  a  sum 
necessary  to  support  them  while  dependent.  The 
sum  would  depend  on  the  number  of  the  children 
and  on  their  age.      The  premium  would  decrease 

222 


National   Insurance 

as  the  children  grew  older,  and  cease  when  the 
children    became    self-supporting   or   if   they   died. 

Would  the  State  provide  facilities  or  allow 
private  enterprise  to  provide  them  for  life  insurance 
payable  at  death  for  any  other  object  than  provision 
for  dependent  children?  If  saving  and  bequest 
be  allowed,  it  would  appear  unreasonable  to  forbid 
insurance  of  this  kind.  And  yet  there  is  an 
element  of  gambling"  in  insurance  which  may  have 
to  be  guarded  against,  and  if  found  clearly 
injurious  to  the  community  or  the  individual 
legatee,   prohibited. 

Fire,  lightning,  floods,  and  earthquakes,  and  all 
possible  catastrophes  or  accidents  which  might 
cause  loss  or  damage  to  private  property,  could 
be  insured  against  through  the  State  insurance 
office,  but  only  a  minimum  would  be  compulsory — 
sufficient,  say,  to  meet  the  necessities  of  the  insured 
and  dependents.  Above  that  minimum,  private 
property  up  to  its  full  value  might  be  insured, 
but  only  at  the  option  of  the  owner.  Industrial 
capital  would  be  compulsorily  insured,  but  this 
would  be  simply  a  matter  of  State  accounting,  and 
the  cost  would  be  raised  from  all.  It  would  be 
part  of  the  working  expenses,  like  depreciation, 
and  would  be  included  in  prices. 


223 


CHAPTER    XI 

TAXATION:    LEGITIMATE   AND    ILLEGITIMATE 

Little  consideration  has  hitherto  been  paid  to 
the  line  of  demarcation  between  legitimate  and 
illegitimate  taxation.  Discussion  has  for  the  most 
part  had  for  its  subject  the  legitimacy  of  public 
services  themselves  and  not  that  pf  the  method 
of  collecting  their  cost.  John  Stuart  Mill,  dis- 
cussing the  functions  of  government,  refuses  "  to 
limit  the  interference  of  government  by  any 
universal  rule,  save  the  simple  and  vague  one  that 
it  should  never  be  admitted  but  when  the  case 
of  expediency  is  strong,"  and  he  deals  at  length 
with  "  the  general  principles  of  taxation."  But 
these  cover  merely  the  incidence,  and  the  time 
and  manner  of  collection,  as  well  as  the  expediency 
of  the  different  kinds  of  direct  and  indirect  taxa- 
tion. He  does  not  find  it  necessary  to  ascertain 
the  principles  according  to  which  one  public  service 
should  be  "  free,"  or  supported  by  taxation  of 
the  public,  and  another  should  be  supported  only 
by  those  who  demand  the  services  and  purchase 
them.  These  principles  we  must  now  endeavour 
to   elucidate. 

224 


Taxation  :  Legitimate  and  Illegitimate 

In  connection  with  taxation  we  do  not  require 
to  discuss  the  functions  of  government,  for 
all  national  collective  enterprise,  according  to  the 
principles  of  Economic  Moralism,  is  justifiable. 
We  have  only  to  concern  ourselves  with  the  manner 
of  collecting  the  cost  of  any  given  public  service. 
As  every  public  service  whatever,  whether  for  the 
benefit  of  many  or  of  few,  is  justifiable,  the  only 
question  is  the  manner  of  its  support,  whether  by 
taxation,  by  individual  voluntary  purchase,  or  by 
compulsory  insurance. 

But  first  we  must  consider  a  mischievous  Socialist 
theory  of  taxation  for  revenue  required  by  the 
State  for  "  free  services,"  which  would  result  in 
gross  injustice.  Mr.  Ramsay  MacDonald  in  his 
"  Socialism  and  Government  "  maintains  that  the 
income  required  by  the  State  need  not  be  taken 
from  individual  incomes  (that  is,  presumably,  by 
direct  taxation),  because  the  State  in  exercising 
its  functions  earns  its  income  just  as  much  as  a 
personal  income  is  earned,  for  it  adds  to  national 
wealth  and  well-being.  He  argues  that  the  main 
bulk  of  its  income  should  be  derived  from  natural 
monopolies  like  land,  from  politically  created 
monopolies  like  liquor  licences,  from  profits  on 
communal  services  like  the  carrying  of  letters  and 
the  supply  of  gas  and  the  running  of  trams — 
from  what  he  calls  the  State's  own  creations  of 
value.  This  proposal  cannot  be  justified  either 
by  Absolute  Ethics  or  Relative  Ethics. 

Under  Economic  Moralism  there  will  be  no  land 
225  p 


Economic  Moralism 

monopoly,  as  already  explained  in  the  chapter  on 
Economic  Rent.  Neither  will  there  be  any  liquor 
licences,  or  "  profits  "  on  any  State  or  communal 
undertaking.  All  such  undertakings  will  be  con- 
ducted solely  for  behoof  of  that  section  of  the 
public  which  requires  them  and  maintains  them. 
It  is  clearly  an  injustice  to  increase  prices  on  any 
commodity  or  service  for  the  purpose  of  maintain- 
ing any  free  service — that  is  to  say,  to  compel  one 
section  of  the  public  to  relieve  any  section,  or  the 
whole  nation,  of  their  duty  to  provide  revenue 
for  "  free  "  services  by  which  they  benefit.  Just 
as  little  can  the  proposal  be  justified  for  appli- 
cation during  the  transition  to  Economic  Moralism. 
For  the  maintenance  of  the  public  free  services 
required  in  any  social  system  there  can  be  no  excuse 
for  collecting  the  revenue  from  any  but  those  who 
benefit  by  them,  and  as  far  as  possible  from  each  in 
proportion  to  the  benefit  enjoyed.  To  keep  the 
prices  of  communal  services  high  in  order  to  make 
a  profit  means  raising  revenue  by  indirect  taxation 
from  the  wrong  people.  The  only  just  tax  in  the 
transition  period  is  the  income  tax,  and  especially 
that  on  unearned  incomes  and  on  very  high  salaries. 
Unearned  income  might  be  taxed  up  to  the  vanish- 
ing point  with  perfect  justice,  provided  sufficient 
allowances  were  guaranteed  to  all  invalid  citizens 
and  for  the  support  of  orphan  children,  and 
there  is  therefore  no  excuse  for  resorting  to  indirect 
taxation  of  the  kind  indicated,  or  any  other  kind. 
The  income  tax  permits  evenhanded  justice  to  be 
done    between   man   and    man.      The   taxation   of 

226 


Taxation  :   Legitimate  and  Illegitimate 

natural  monopolies  like  land  simply  means  the 
singling  out  of  one  section  of  the  capitalist  class 
for  punitive  treatment.  All  land  and  capital  are 
only  of  value  to  their  owners  to  the  extent  of  their 
income-producing  capacity.  And  all  such  income 
is  equally  stolen  from  the  workers.  In  the  market 
the  price  does  not  depend  on  the  nature  of  the 
monopoly,  whether  natural  or  artificial,  or  whether 
the  capital  can  be  correctly  termed  a  monopoly 
or  not.  It  is  grossly  inaccurate  to  say,  as  Mr. 
MacDonald  does,  that  a  man  with  £-100  per  annum 
from  Consols  gets  more  direct  benefit  from  the  State 
than  a  man  with  £1,000  per  annum  derived  from 
surgical  skill,  or  a  man  with  £500  a  year  from 
ground  rents  than  a  merchant  pocketing  ten  times 
as  much  in  profits.  It  would  be  unjust  to  differ- 
entiate between  the  owners  of  the  various  kinds  of 
land  and  capital,  even  when  the  return  on  the 
original  capital  or  investment  is  very  high.  To 
an  overwhelming  extent  the  holdings  have  passed 
out  of  the  hands  of  the  original  investors  at  such 
a  high  figure  that  present  holders  simply  receive 
what  Adam  Smith  called  the  ordinary  profits  of 
stock.  Again,  to  place  a  tax  on  suburban  lands, 
in  order  to  force  them  into  the  market  for  building, 
is  prejudicial  to  all  the  interests  of  the  country. 
It  is  a  clumsy  and  ineffective  attempt  to  get  rents 
reduced.  Tenements  are  run  up  on  the  open 
spaces,  which  either  as  private  gardens  or  as  agri- 
cultural land  served  as  lungs  for  the  city — and 
the  citizens  suffer.  The  problem  of  housing  cannot 
be  solved  in  this  way.     If  land  is  obviously  being 

227 


Economic   Moralism 

held  for  speculative  purposes,  and  is  really  required 
for  building,  the  proper  public  authorities  ought 
to  get  powers  to  acquire  it.  When  the  community 
needs  it,  it  should  be  acquired  at  its  price  as  a 
reasonable  revenue-producing  investment  uninflated 
by  speculation  in  its  prospective  sale  to  the  public. 
Socialists  stultify  themselves  in  advocating  such 
roundabout  and  ineffective  measures.  Their  false 
theory  of  taxation  is  based  mainly  on  the  "  bio- 
logical "  theory  of  the  State,  with  which  they  have 
been  fascinated  and  which  they  carry  to  such  an 
absurd  and  illogical  extent  as  to  regard  the  State 
as  being  a  distinct  personality  with  earning  power. 

Taxation  is  the  legal  collection  of  money  by 
a  duly  authorized  public  body  from  individual 
citizens  to  cover  the  cost  of  public  services,  of 
which  the  cost  of  the  benefit  to  each  citizen  it  is 
impracticable  to  estimate  or  collect  each  time  that 
benefit  is  enjoyed.  What  is  collected  may  be  a 
legitimate  or  an   illegitimate  tax. 

A  tax  is  legitimate  if  it  is  for  the  maintenance 
of  any  public  service  that  is  of  equal  benefit  to  all, 
or  that  benefits  all  more  or  less,  and  of  which  also 
the  incidence  is  as  nearly  as  possible  in  proportion 
to  that  benefit. 

Legitimate  taxation  is  such  as  that  for  the  Army 
and  the  Navy,  and  all  national  defence  ;  for  police 
and  the  administration  of  justice  ;  for  streets, 
roads  and  bridges,  public  drainage  and  sanitation, 
public   lighting,  parks  and  gardens. 

The  cost  of  invalidity  and  old  age  allowances, 
228 


Taxation  :   Legitimate  and  Illegitimate 

of  the  maintenance  of  widows  and  orphans,  of 
hospitals  and  all  medical  treatment  and  advice, 
is  excluded  from  taxation  proper  and  falls  into  the 
category   of  insurance,  as   already  explained. 

Rates  for  gas  and  electric  light  are  not  taxes 
proper,  but  payment  for  industrial  services  strictly 
based  on  the  quantity  rendered. 

Illegitimate  taxation  is  such  as  that  for 
the  Church,  for  amusements,  education,  science, 
libraries,  art-galleries  and  museums — that  is,  for 
everything  that  interests  or  is  necessary  for  only 
sections,  be  they  great  or  small,  of  the  population. 

Let  us  consider  a  number  of  the  various  services 
that  must  be  maintained  by  taxation.  Such  services 
are  to  be  distinguished  by  the  impracticability  of 
estimating  the  value  of  their  benefit  to  the  indi- 
vidual each  time  they  are  enjoyed.  They  there- 
fore find  their  place  by  reason  of  their  nature  and 
not  arbitrarily. 

The  Army  and  the  Navy,  and  every  service 
necessary  for  the  integrity  and  independence  of 
the  State,  i.e.  the  organized  people,  against  foreign 
aggression  (for  there  may  be  some  Moralist  States 
before  the  inauguration  of  universal  peace)  must 
by  their  very  nature  be  maintained  by  means  of 
taxation.  Under  Capitalism  much  discussion  arises 
regarding  the  incidence  of  this  and  similar  taxes, 
and  it  is  necessitated  by  the  inequality  of  the 
incomes  of  the  people.  Under  Moralism  there 
would  be  no  trouble  on  this  score.  With  equality 
of  opportunity,  if  not  of  actual  income   (for  some 

229 


Economic   Moralism 

will  place  less  value  on  material  wealth  than  others 
and  will  not  therefore  trouble  to  earn  as  much), 
an  equal  poll-tax  on  every  able-bodied  citizen, 
male  and  female,  would  be  truly  equitable. 

Protection  of  the  organized  people  against 
internal  disorder,  and  the  administration  of  justice, 
involving  the  maintenance  o'f  police,  judges,  and 
others,  cannot  be  the  subject  of  voluntary  purchase 
and  must  therefore  be  covered  by  a  general  poll- 
tax,  but  much  of  the  cost  ought  to  be  met  by  the 
fines  or  the  labour  of  prisoners,  who  should  be  com- 
pelled to  do  the  greatest  amount  of  work  consistent 
with  health.  Under  Moralism  prison  labour  could 
not  have  an  injurious  effect  on  the  work  or  wages 
of  any  section  of  the  community,  as  it  must  have 
under  Capitalism.  That  arrangement  would  reduce 
the  expenses  in  connection  with  the  administration 
of  the  criminal  law.  It  is  a  perfectly  just  arrange- 
ment that  part  of  the  punishment  of  those  convicted 
of  breaking  the  laws  should  consist  of  bearing  as 
far  as  possible  the  national  expenses  necessitated 
by  such  conduct.  The  speculative  questions  of 
the  extent  to  which  a  system  of  Economic  Moralism 
would  diminish  crime,  and  of  the  proper  methods 
of  dealing  with  it,  are  beyond  the  scope  of 
this  work. 

The  expenses  in  connection  with  civil  litigation 
ought  also  to  be  borne  to  a  certain  extent  by 
those  who  come  before  the  courts  and  are  found 
to  be  in  the  wrong.  Litigation  under  Moralism 
will  presumably  be  rare.  There  will  be  little 
occasion   for   it,   owing   to   the   transfer  of   capital 

230 


Taxation  :   Legitimate  and  Illegitimate 

and  land  from  private  individuals  to  the  nation. 
Private  property,  the  great  source  of  litigation, 
will  have  shrunk  to  comparatively  insignificant 
dimensions.  Nevertheless,  there  will  doubtless  be 
disputes  that  will  be  carried  to  the  courts,  and  the 
problem  is  to  formulate  a  principle  which  will 
govern  the  distribution  of  costs.  Some  advocate 
"  free  "  justice,  and  would  meet  all  the  expenses 
by  taxation— that  is  to  say,  would  make  every  able- 
bodied  citizen  pay  his  or  her  share  of  these  public 
expenses.  There  is  much  to  be  said  for  such 
an  arrangement  under  Capitalism,  when  the  poor 
man  is  most  seriously  handicapped  in  any  conflict 
with  the  rich.  But  under  Economic  Moralism 
it  could  not  be  justified.  Were  the  law  then  as 
complicated,  obscure,  and  difficult  to  interpret  as 
it  is  now,  there  might  be  justification  for  making 
every  one  bear  an  equal  share  of  the  expense  of 
interpreting  it.  And  yet,  simplified  as  it  would 
be  in  direct  consequence  of  the  simplification  of 
the  economic  conditions,  it  would  no  doubt  cost 
much  time  to  acquire  a  thorough  knowledge  of  all 
its  branches,  or  even  any  one  of  them.  An 
elementary  general  knowledge  would  be  required 
by  every  citizen,  and  it  would  be  acquired  by 
private  reading  or  at  public  institutions  at  one's 
own  expense,  or  when  in  connection  with  one's 
work,  at  the  expense  of  the  guild  concerned.  If 
owing  to  want  of  knowledge  a  person  were  to 
get  into  trouble,  he  would  have  himself  to  blame 
and  would  have  to  suffer  the  consequences.  But 
there  would  be  much  legal  knowledge  which  the 

231 


Economic  Moralism 

vast  majority  of  the  citizens  would  not  try  to 
acquire;  and  yet  at  one  time  or  another  the  indi- 
vidual citizen  might  have  need  of  legal  advice. 
Although  much  seldomer  than  now,  this  he  would 
with  perfect  equity  have  to  obtain  from  experts, 
from  lawyers  in  the  public  service,  at  his  own 
expense.  The  maintenance  of  the  law-courts, 
judges,  and  other  officials  would  in  great  part 
be  borne  by  the  litigants.  This  maintenance  would 
not  be  so  great  as  it  is  at  present  in  comparison 
with  the  cost  of  other  services.  But  according 
to  what  rule  would  the  cost  be  shared  between 
the  Government  and  the  litigants?  The  party  in 
whose  favour  judgment  is  given  ought  to  have 
all  expenses  paid  by  the  losing  party,  if  the  case 
were  obviously  a  trumped  up  one,  or  they  should  be 
shared  equally  if  it  arose  from  a  mutual  misunder- 
standing on  a  point  of  law.  But  what  share 
ought  to  be  borne  by  the  nation?  It  is  not  desirable 
that  the  share  of  litigants  should  be  so  heavy  as 
to  prevent  a  citizen  with  a  grievance  against 
another  from  asking  justice,  but  it  ought  to  be 
heavy  enough  to  prevent  the  time  of  the  judiciary 
being  taken  up  with  trifles.  Litigation  in  great 
part  might  be  avoided  by  the  exercise  of  a  little 
sweet  reasonableness.  With  the  natural  sense  of 
justice  undistorted  by  the  individualism  and  selfish- 
ness necessitated  by  the  capitalist  system,  and  with 
the  reduction  of  the  irritation  and  bad  temper 
due  to  the  straining  of  the  nerves  by  the  harassing 
cares  and  the  worry  of  the  struggle  for  existence, 
most   disputes    would    be    settled   amicably.      The 

232 


Taxation  :   Legitimate  and  Illegitimate 

probability  would  therefore  be  that  most  of  the 
cases  coming  before  the  courts  would  have  their 
origin  in  the  obscurity  of  the  law,  and  in  such 
cases  the  expenses  should  be  borne  by  the  State. 
It  seems,  therefore,  that  as  at  present  the  distribu- 
tion of  the  costs  would  be  left  to  the  court,  each 
case  being  decided  on  its  merits.  The  guiding 
principle  would  be  that  if  a  dispute  could  have 
been  settled  by  any  ordinarily  fair-minded  person, 
the  offending  party  or  parties  should  bear  a  share 
of  the  national  cost  of  maintaining  the  judiciary — 
in  other  words,  they  would  have  a  fine  inflicted 
on  them,  the  amount  of  which  would  depend  on 
the  ability  of  the  ordinary  citizen  to  pay  and  on  its 
efficiency  as  a  deterrent. 

A  large  proportion  of  disputes  would  probably 
be  between  workers,  individually  or  represented 
by  their  unions,  and  the  guilds  or  public  bodies, 
bearing  on  remuneration  of  labour,  hours  of 
work,  and  other  industrial  conditions.  The  same 
principle  would  hold  good  here  regarding  alloca- 
tion of  expenses  :  the  less  excusable  the  action, 
the  greater  charge  to  the  losing  party,  but  in  no 
case  the  charge  a  ruinous  one.  If  the  cost  of  the 
administration  of  justice  be  high  in  proportion  to 
the  cases  tried,  the  whole  country  should  share  the 
expense,  so  that  individuals  should  not  have  to 
suffer. 

To  turn  to  quite  another  branch  of  the  public 
expenditure.  We  have  mentioned  the  maintenance 
of    roads    as    a    legitimate    subject    for    taxation. 

233 


Economic  Moralism 

Wherein  do  roads  and  railways  differ,  that  the 
cost  of  maintenance  should  not  be  raised  in  the 
same  way?  The  whole  railway  and  its  manage- 
ment must  be  in  the  same  hands,  as  only  specially 
adapted  vehicles  can  be  run  on  it  and  under  strict 
regulations.  Passengers  and  goods  can  be  trans- 
ported only  by  the  rolling  stock  thus  controlled, 
and  it  is  therefore  easy  and  inexpensive  to  collect 
the  expenses  of  the  railway  from  those  using  it. 
With  the  roads  it  is  a  very  different  matter.  The 
same  regulation  of  traffic  is  not  required.  More- 
over, the  rolling  stock  may  belong  to  numerous 
owners  and  can  enter  the  roads  at  many  points, 
and  so  can  foot-passengers,  so  that  a  system  of 
tolls,  though  just,  is  expensive  or  ineffective,  or 
both.  But  the  present  incidence  of  taxation  is 
unquestionably  indefensible.  A  tax  on  rentals 
apportioned  between  owner  and  occupier  is  unjust. 
Therefore,  although  taxation  is  evidently  the  proper 
method,  its  incidence  must  be  changed.  Certain 
roads  have  been  made  for  specific  industrial 
purposes.  A  branch  road  to  a  quarry  ought 
evidently  to  be  maintained  at  the  expense  of  the 
users  of  the  materials  got  from  the  quarry  ;  a 
branch  road  on  or  to  a  farm,  similarly,  at  the 
expense  of  the  consumers  of  that  farm's  produce. 
The  maintenance  of  such  branch  roads  ought  to  be 
charged  against  the  industry  for  the  benefit  of 
which  they  exist.  Such  expenses  there  can  be  no 
difficulty    in    assessing    and    collecting. 

But    there    are    the    main    roads    and    the    cross 
roads.      Who  use  these  roads?    Most  of  the  wear 

234 


Taxation  :   Legitimate  and  Illegitimate 

and  tear  is  caused  by  vehicular  traffic  belonging 
to  various  industrial  interests  (some  of  which  may 
be  responsible  for  the  entire  upkeep  of  their  branch 
roads),  some  of  it  even  under  Economic  Moralism 
would  be  caused  by  vehicles  or  horses  kept  by 
private  persons  for  pleasure,  and  some  of  it  by 
foot  passengers.  All  the  expense  of  maintaining 
these  roads  must  be  collected  from  these  interests 
and  persons  in  proportion  to  the  estimated  wear 
and  tear  caused  by  each.  This  could  easily  be 
calculated  with  a  fair  approximation  to  justice. 
Each  kind  of  vehicle  would  have  a  tax  placed 
upon  it  in  proportion  to  the  damage  it  was  likely 
to  do,  the  heavy  wagon  and  the  huge  motor 
paying  at  a  higher  rate  than  the  little  pony-chaise. 
Similarly  an  approximately  correct  estimate  might 
be  made  of  the  expense  incurred  on  account  of 
animals,  also  those  on  account  of  foot  passengers, 
but  any  part  due  to  the  unusually  difficult  nature 
of  the  ground  ought  to  be  charged  against  the 
industries  of  the  district.  Districts  are  inhabited 
because  of  their  economic  suitability  and  in  propor- 
tion to  it.  The  inhabitants  are  there  for  the 
purpose  of  running  the  industries  for  the  consumers, 
and  the  lowest  necessary  charge  for  foot  passengers 
made  in  any  district  should  be  taken  as  the  charge 
for  all  districts,  any  surplus  expense  due  to  the 
character  of  the  ground  or  difficulty  in  getting 
material  for  improving  being  charged  against  the 
industries. 

The    cost    of    maintenance    in    any    district    will 
be   as    exactly    as    possible    laid   upon    those   who 

235 


Economic   Moralism 

use  the  roads  ;  but  the  vehicles  of  an  industry- 
would  perhaps  regularly  use  roads  lying  outside 
of  the  district  in  which  it  is  domiciled,  and  the 
possible  heavy  wear  and  tear  may  thus  be  charged 
to  industries  in  the  neighbouring  districts.  This 
would  be  the  case  with  heavy  motor -omnibuses 
running  through  two  or  three  counties.  It  might 
be  necessary  for  the  district  collecting  the  tax  to 
pay  part  of  it  to  those  other  districts,  or  if  collected 
by  a  central  authority  for  the  tax  to  be  allocated 
on  some  such  lines.  But  that  is  a  detail.  Vehicles 
for  personal  use  might  have  the  freedom  of  the 
whole  country  on  paying  the  local  tax,  which  might 
in  justice  be  kept  by  the  district  collecting  it. 
Only  the  tax  on  certain  public  vehicles  would  have 
to  be  divided  between  two  or  more  districts.  The 
tax  on  vehicles  for  occasional  personal  use,  too, 
would  have  to  be  lighter  than  that  on  regular 
industrial  vehicles   constantly   on   the   road. 

Streets  in  villages  and  towns  of  all  sizes  offer 
the  same  problem,  and  the  same  principle  ought 
to   be   applied. 

But  measures  would  have  to  be  taken  to  safe- 
guard the  interests  of  those  who  eventually  pay 
a  great  part  of  the  tax,  namely  the  consumers  of 
the  exports  of  the  district,  who  may  be  scattered 
over  the  country  far  and  wide.  There  would  be 
considerable  temptations  to  local  populations  to 
incur  unnecessarily  great  expenditure,  if  it  were  to 
be  chargeable  for  the  most  part  to  people  in  other 
parts  of  the  country.  It  would  therefore  seem 
advisable   to  have  an   impartial  national  authority 

236 


Taxation  :   Legitimate  and  Illegitimate 

to  supervise  the  management  of  roads  and  bridges, 
and  to  regulate  all  expenditure  thereon. 

Again,  with  regard  to  public  drainage  and  sani- 
tation, public  drainage  is  all  the  common  drainage 
in  any  district  ;  piping  for  drains  within  houses, 
and  all  drains  (except  when  the  ground  is  built 
upon  admittedly  on  account  of  pressure  of  popula- 
tion) up  to  the  point  where  they  join  a  common 
drain,  ought  to  be  at  the  charge  of  the  occupiers 
of  the  houses.  The  cost  of  the  public  drainage 
must  be  collected,  not  from  the  householders  as 
such,  but  from  the  industries  which  are  responsible 
for  the  existence  of  any  given  commune.  Cost  of 
drainage  varies  greatly,  and  depends  on  the  situa- 
tion, geographical,  geological,  etc.,  of  the  district. 
Therefore  any  advantage  or  disadvantage  should 
be  at  the  charge  of  those  for  whom  the  commune 
exists  as  a  producer.  The  extent  and  therefore 
the  cost  of  private  drainage  depends  on  the  extent 
of  the  house  property,  and  as  that  depends  on  the 
tastes  of  the  individual,  it  ought  to  be  at  his  charge. 
It  may  be  urged  that  if  local  expenses  could  thus 
be  imposed  upon  the  general  public,  or  rather 
the  scattered  body  of  consumers,  there  would  be 
no  inducement  to  local  authorities  to  economize, 
at  all  events  in  conditions  of  low  morality.  But 
a  national  corps  of  engineering  experts  would  have 
no  local  prejudices,  and  the  planning  and  con- 
struction of  drains  all  over  the  country  would  be 
in  their  hands  and  managed  on  the  same  principles 
everywhere.     New  systems  of  drainage  and  expen- 

237 


Economic  Moralism 

sive  repairs  would  require  the  sanction  of  an 
unprejudiced  body  of  administrators,  and  the 
interests  of  all  would  thus  be  safeguarded. 
Honesty,  integrity,  and  efficiency  will  increase  in 
the  public  services  in  proportion  as  inequality  of 
income  and  treatment  disappears. 

For  other  sanitary  arrangements,  such  as  street 
cleansing,  there  seems  no  reason  to  charge  any 
one  except  those  who  directly  benefit.  The  expense 
should  be  covered  by  a  poll-tax  on  all  the  able- 
bodied.  On  the  whole  the  average  charge  would 
be  very  much  the  same  all  over. 

As  to  public  lighting,  the  same  arrangement 
would  hold  good.  But  the  lighting  of  common 
stairs  should  not  be  at  the  public  expense.  It 
may  be  defensible  now,  although  even  that  is 
doubtful.  But  under  Economic  Moralism,  if  a 
number  of  families  wish  to  live  in  common  for  the 
sake  of  economy  or  social  life,  they  would  have  to 
pay  for  the  lighting  of  their  common  property 
required  for  the  convenience  of  themselves  and 
their  visitors. 

With  regard  to  public  parks  and  gardens,  golf- 
courses,  bowling  greens,  and  other  places  of  like 
nature,  open  spaces  are  necessary  for  health  and 
pleasure,  but  at  whose  expense  are  they  to  be  main- 
tained? The  farming  population  do  not  require 
special  places  of  this  kind,  nor  do  the  small 
villages.     Unless  prevented  by  the  tyranny  of  land- 

238 


Taxation  :   Legitimate  and  Illegitimate 

lords,  they  have  free  access  to  field,  wood,  and 
stream.  As  a  rule  they  have  also  private  gardens, 
and  for  games  an  open  green  which  costs  practi- 
cally nothing  for  upkeep.  The  dwellers  in  towns 
and  cities  are  not  so  fortunate.  Many  have  a 
considerable  distance  to  go  in  order  to  reach  the 
country,  and  generally  landlordism  confines  them 
to  the  high-road,  where  they  are  suffocated  by  the 
dust  and  stench  raised  by  automobiles.  The  open 
spaces  are  inadequate,  and  consequently  require 
to  be  tended  at  considerable  cost.  Under  Eco- 
nomic Moralism,  with  landlordism  abolished,  all 
woods  and  meadows  and  banks  of  streams,  all 
moors  and  mountains,  will  be  free  to  all,  and  every 
one  will  learn  how  to  enjoy  public  property  without 
damaging  it.  No  expense  need  be  incurred  for 
the  upkeep  of  such  places.  Even  farm  roads  and 
paths  by  the  sides  of  fields  (the  latter  might  be 
multiplied  without  cost)  will  be  open  to  the  public. 
In  this  way  those  dwelling  on  the  outskirts  of 
towns  and  cities  will  be  as  well  off  as  those  in  the 
villages.  But  those  in  the  centre,  especially  of 
the  larger  towns,  would  be  at  a  considerable  dis- 
advantage. Should  no  compensation  be  given 
them  in  the  shape  of  urban  parks  and  gardens? 
Let  us  follow  out  the  evolution  of  a  town  on 
rational  lines.  Every  new  extension  would  be 
made  in  such  fashion  as  to  preserve  sufficient  space 
and  vegetation,  not  only  for  the  purpose  of  secur- 
ing fresh  air  for  the  citizens  but  of  affording  them 
opportunity  of  physical  exercise  in  touch  with 
Nature.     As  Nature  within  the  precincts  of  a  town 

239 


Economic   Moralism 

would  necessarily  be  largely  artificial,  there  would 
be  expense  incurred,  and  this  expense  would  in 
justice  be  laid  upon  the  industries  of  which  the 
growth  necessitated  the  development  of  the  town. 
The  expense,  however,  need  be  but  slight,  because 
the  townsmen  would  have  no  right  to  have  public 
gardens  richly  stocked  with  expensive  flowers  or 
exotic  plants.  The  gardens  and  parks  ought  to 
be  laid  out  in  the  simplest  and  most  natural  way 
possible  with  native  plants,  shrubs,  and  trees,  which 
would  be  placed  in  a  suitable  environment  for  their 
perfect  growth,  with  sufficiency  of  light,  air,  and 
space,  the  land  of  course  costing  nothing.  An  im- 
partial administrative  body  acting  under  Acts  of 
Parliament  would  be  authorized  to  regulate  the 
expense  of  such  parks  and  gardens  on  behalf  of  the 
scattered  consumers  of  the  local  products,  who 
would  be  charged  with  the  expense. 

For  games,  such  as  golf,  bowls,  tennis,  croquet, 
archery,  and  so  on,  sufficient  ground  would  have 
to  be  set  apart  without  charge,  but  the  upkeep 
of  the  ground  necessary  for  the  games  would  have 
to  be  at  the  expense  of  those  indulging  in  the 
pastimes. 

Would  there,  then,  be  no  lovely  public  gardens 
with  rare  and  beautiful  flowers?  In  certain  educa- 
tional centres  there  would  necessarily  be  botanic 
gardens,  but  expensive  flower  gardens  would  not 
be  maintained  at  the  public  expense  by  taxation. 
They  would  be  established  and  maintained,  like 
any  other  place  of  amusement  or  recreation,  at 
the  expense  of  those  who  desired  to  have  them. 

240 


Taxation  :   Legitimate  and  Illegitimate 

Now  let  us  consider  the  reasons  for  condemning 
certain  taxation  as  illegitimate. 

Tithes,  and  indeed  all  Church  endowments  based 
on  taxation,  or  rent,  or  interest,  are  justifiable. 
A  Church  is  not  an  institution  to  which  every  citizen 
belongs  or  of  which  every  citizen  approves.  Every 
Church  exists  for  the  benefit  of  a  section  only  of 
a  community,  and  no  section  of  the  people  has  any 
right  to  exact  money  in  any  way  from  others  for 
benefits  these  others  do  not  enjoy  or  desire.  Under 
Economic  Moralism  the  expense  of  preaching  and 
teaching  any  kind  of  theological  doctrine  will  be 
borne  by  those  who  have  such  doctrine  at  heart, 
and  by  them  alone.  If  organized  as  a  public 
department,  unlikely  as  that  would  be,  the  cost 
of  it  would  be  borne  by  those  availing  themselves 
of  the  service. 

Then  as  to  education.  The  communistic 
financing  of  education  under  Capitalism  has 
acquired  such  a  firm  hold  that  hardly  any  Con- 
servative, or  Liberal,  or  Socialist  thinks  that  it 
requires  any  defence.  It  even  forms  a  vantage- 
ground  for  the  advocacy  and  extension  of  other 
communistic  schemes,  in  which  Liberals  and  Con- 
servatives as  well  as  Socialists  are  concerned. 
The  only  approach  to  a  reasonable  defence  of  such 
Communism  is  that  in  present  conditions  the 
workers  cannot  afford  to  pay  for  the  education 
of  their  children.  Such  defence  will  not  be  possible 
under  Economic  Moralism.  The  only  possible 
excuse  for  it  would  be  that  bachelors  and  spinsters 

241  Q 


Economic  Moralism 

would  be  evading  their  "  duty  "  to  multiply  and 
replenish  the  earth,  and  should  therefore  be  com- 
pelled to  assist  parents,  and  people  with  small 
families  would  have  to  help  those  with  large 
families.  The  answer  is  that  it  has  not  been  proved 
to  be  a  "  duty."  A  dense  population  is  far  from 
desirable,  and  a  pressure  of  population  on  the 
means  of  subsistence  is  productive  of  much  misery, 
which  results  frequently  in  forced  emigration  and 
aggressive  warfare.  If  people  have  not  sufficient 
joie  de  vivre  to  have  children,  if  they  are  pessi- 
mistic and  desirous  of  race  suicide,  why  not  let 
such  strains  die  out?  Why  penalize  them  by  placing 
other  burdens  upon  them  which  would  rather 
increase  their  pessimism?  Why  force  them  to  con- 
tribute to  the  expenses  of  people  whose  only  virtue 
perhaps,  if  virtue  it  can  be  called,  is  a  superabun- 
dance of  philoprogenitiveness?  It  is  an  unwarrant- 
able interference  with  the  liberty  of  the  individual 
and  unnecessary  for  society. 

Of  technical  education,  again,  there  has  in  recent 
years  been  a  great  extension  at  the  public  expense. 
As  has  already  been  indicated,  such  education 
ought  to  be  entirely  at  the  expense  of  the  guild 
concerned. 

To  what  extent,  if  any,  is  Science  to  be  sub- 
sidized by  the  State?  It  has  had  little  assistance 
under  Capitalism.  A  few  meteorological  stations, 
subsidies  to  a  few  polar  expeditions,  grants  to  a 
few  museums,  and  little  else,  are  what  Science 
has  'had  to  thank  the  State  for.     Its  cause  has  been 

242 


Taxation  :   Legitimate  and  Illegitimate 

advanced  by  those  who  have  worked  for  the  love 
of  it.  Endowments  have  been  given  by  individuals, 
and  owing  to  the  power  of  capital  to  extract  rent 
and  interest  from  the  working  people,  these  endow- 
ments seem  to  last  for  ever.  Under  Economic 
Moralism  enthusiasts  in  greatly  increased  numbers 
will  undoubtedly  work  for  the  endowment  of  re- 
search and  of  the  spread  of  knowledge,  but  such 
endowments  will  have  continually  to  be  renewed, 
for  what  we  call  the  capital  sum  will  have  to  be 
used  up,  as  there  will  be  no  rent  or  interest  to 
accrue  on  it,   no  perpetual  income. 

The  advancement  of  science,  taking  all  in  all, 
is  most  desirable,  but  there  is  the  greatest  diversity 
of  opinion  as  to  the  comparative  utility  and  worth 
of  the  various  departments  of  science.  It  is  true 
that  even  the  apparently  least  fertile  fields  of 
investigation  may  unexpectedly  at  some  time  or 
other  yield  up  truths  of  great  value,  throwing 
a  wealth  of  light  on  problems  of  much  interest 
and  value  to  the  human  race.  But  at  the  present 
stage  of  civilization  it  can  hardly  be  said  that  the 
knowledge  still  to  be  gained  would  be  of  vital  im- 
portance to  the  race.  If  the  race  never  discovered 
another  scientific  truth,  future  generations  might 
lead  a  healthy  and  happy  life  in  acquiring  and 
applying  the  accumulated  knowledge  of  the  past 
and  beautifying  existence  by  art.  There  is  there- 
fore no  clamant  call  for  the  endowment  of  science 
in  general  by  the  State.  And  even  if  this  had 
not  been  so,  it  is  doubtful  if  State  endowment  could 
be   defended,   for  to   give   carte  blanche  to   scien- 

243 


Economic   Moralism 

tific  bodies  for  the  endowment  of  science  would 
possibly  lead  to  the  corruption  of  such  bodies  and 
their  erection  into  a  privileged  caste,  and  to  the 
re-imposition  of  an  intolerable  burden  on  the 
shoulders  of  the  people.  The  people  must  keep 
a  firm  hand  on  the  public  purse,  and  resist  the 
communistic  claims  of  all  kinds  which  will  be  made 
upon  it.  For  this  reason  it  is  of  first  importance 
to  determine  the  principles  of  legitimate  taxation. 
Science  will  not  suffer,  but  will  rather  benefit  from 
being  denied  State  endowment.  The  people  being 
better  educated  and  having  greater  leisure,  there 
will  be  a  greater  number  who  will  devote  them- 
selves with  ardour  to  scientific  pursuits.  As 
Kropotkin  points  out,  science  is  much  retarded 
under  Capitalism  by  the  want  of  intelligence  and 
education  among  the  people,  from  whom  scien- 
tists proper  require  much  assistance  in  observation 
and  recording  work. 

But  the  utmost  vigilance  will  have  to  be  exer- 
cised to  prevent  science  making  insidiously  a 
parasitic  lodgment  on  the  body  politic.  There 
will  be  opportunity  for  it.  The  officers  of  health, 
physicians,  and  surgeons  who  will  have  charge 
of  the  hygienic  arrangements  of  society  will  be 
expected,  as  a] ready  explained,  to  do  their  utmost 
to  increase  human  knowledge  in  their  department 
and  at  the  public  expense.  But  their  expenditure 
must  be  carefully  supervised  by  the  public  and 
its  representatives.  Grants  will  only  be  given  on 
sufficient  cause  being  shown,  and  the  results  will 
have    to    justify    them.      The    scientists    will   have 

244 


Taxation  :   Legitimate  and  Illegitimate 

to    explain  clearly   what   work  they  intend  to   do, 
and  the  benefits  likely  to  accrue. 

Similarly  in  the  productive  arts,  which  derive 
benefit  from  the  applications  of  science,  research 
will  be  required,  and  scientific  men  will  be  em- 
ployed in  various  departments  of  these  arts,  just 
as  they  are  to-day  under  Capitalism.  Here  again, 
scientists  will  have  to  justify  their  employment. 
The  demand  for  such  research  in  any  department 
will  come  from  the  various  producing  centres,  and 
will  be  made  to  the  central  authority  of  that  depart- 
ment. To  safeguard  the  interests  of  consumers 
that  authority  should  not  be  allowed  to  employ 
these  men  and  to  place  the  cost  of  their  main- 
tenance and  their  experiments  on  the  price  of  the 
articles  of  consumption,  without  first  satisfying  the 
public  representatives  that  the  work  is  necessary. 
A  demand  may  arise  from  a  number  of  departments 
for  research  work  likely  to  benefit  all  jointly  more 
or  less.  Special  arrangements  could  be  made  to 
divide  the  expense  equitably  among  them. 

Free  libraries  so-called  have  been  instituted  by 
a  philanthropic  millionaire,  who  contributes  most 
if  not  all  the  initial  cost,  with  the  stipulation  that 
the  community  should  tax  itself  for  their  main- 
tenance. Under  Economic  Moralism  every  one 
will  be  able  to  pay  for  the  use  of  a  public  library, 
and  will  not  need  the  assistance  of  those  who  do 
not  care  for  books,  and  do  not  make  use  of  the 
library  at  all  or  in  the  same  degree.  The  cost 
of    maintenance     can    easily    be     calculated    and 

245 


Economic  Moralism 

distributed  over  the  average  number  of  readers. 
There  is  no  excuse  whatever  for  communism  in 
this  case. 

With  regard  to  historical  documents  and  their 
publication,  and  the  great  reference  libraries  like 
that  of  the  British  Museum,  on  what  grounds  is 
the  State  justified  in  incurring  expenditure  on 
them?  The  reproduction  and  publication  of 
historical  documents  should  be  left  to  historical 
societies,  of  which  there  would  be  a  greater  number 
than  at  present.  Even  the  acquisition  and  custody 
of  these  by  the  State  might  and  ought  to  be 
financed  by  the  freewill  offerings  of  those 
interested  in  such  work.  When  so  much  has  been 
done  under  Capitalism  by  private  effort  in  this 
direction,  how  much  more  would  be  done  under 
Moralism,  when  the  number  of  enthusiasts  will  be 
greatly  increased.  The  cost  of  the  housing  and 
care  of  such  collections  under  the  State  could  be 
met  by  private  subscription,  and  by  payments  made 
by  the  users. 

Fine  art  collections  would  be  financed  in  the 
same  way,  not  at  the  public  expense,  but  by  private 
subscription,   and  by  a  charge  for  admission. 

Museums  would  be  similarly  dealt  with.  But 
these  would  be  mainly  collections  required  by 
students  of  the  various  crafts  and  professions. 
They  would  have  to  be  financed  by  the  crafts  and 
professions  or  guilds  concerned,  each  for  its  own 
collection,  and  outsiders  might  be  allowed  the  use 
thereof  on  payment  of  a  fee  or  by  courtesy. 

246 


SECTION    II 

THE  PRACTICAL:   BASED   ON  RELATIVE 
ETHICS 


CHAPTER    XII 

THE  TRANSITION   TO   ECONOMIC 
MORALISM 

The  ideal  economic  framework  having  been 
sketched  in  its  broad  features,  the  practical  work 
of  converting  the  economic  system  of  Capitalism 
into  that  of  Economic  Moralism  must  now  be 
considered,  necessarily,  however,  in  but  a  cursory 
manner  here. 

But  before  considering  the  means  of  attaining  the 
ethical  ideal,  let  us  glance  at  the  probable  effect  of 
a  system  of  economic  justice  on  the  production  of 
material  wealth.  The  present  national  income, 
according  to  various  statisticians,  ranges  from 
£1,750,000,000  to  £2,500,000,000  per  annum, 
which  equally  divided  yields  from  £200  to  £260 
per  family  of  five.  Under  Economic  Moralism 
the   output    of    the    nation    would    be    enormously 

247 


Economic  Moralism 

increased,  because  the  workers  would  be  healthier 
and  more  efficient  owing  to  the  improved  industrial 
conditions,  would  be  better  educated,  and  would 
have  a  better  technical  training.  Moreover,  the 
new  industrial  system,  being  conducted  for  the 
common  good,  would  call  forth  the  best  powers 
of  the  people.  The  worker  would  reap  the  full 
value  of  his  labour,  and  he  would  know  that  even 
if  any  mistake  were  made  in  allocating  his  share, 
it  would  benefit  the  whole  community,  and  would 
not  go  into  the  pockets  of  any  one  whose  object 
was  to  get  as  much  out  of  the  community  as 
possible.  The  idea  of  the  Common  Weal  would 
fructify.  Capitalism  deteriorates  character.  The 
workman  knows  that  his  masters  get  something 
for  nothing,  that  they  get  "  surplus  value,"  and 
he  is  tempted  to  circumvent  them.  He  may  feel 
that  he  is  entitled  to  "  do  "  them,  just  as  they 
"  do  "  him.  He  adopts  the  commercial  principle. 
This  accounts  for  most  of  the  slacking,  this  together 
with  notions  about  overproduction  and  the  necessity 
of  limiting  output.  Then  there  is  the  fear  of  a 
higher  production  required  from  all  without  a 
corresponding  reward,  should  a  few  work  their 
hardest,  the  consequence  being  the  "  ca'  canny  " 
policy.1 

Not  only  would  the  factor  of  labour  be  improved 

1  Wonderful  stories  are  current  of  the  production  in  the 
munition  works  during  the  War,  unskilled  women  in  some 
cases  turning  out,  it  is  said,  several  times  the  quantity  of  work 
that  skilled  workmen  produced  in  normal  times  ! 

248 


Transition  to  Economic  Moralism 

by  the  substitution  of  morality  for  immorality  in 
economics.  The  tools,  machinery,  and  general 
organization  would  be  vastly  improved.  Even  now 
this  country  lags  behind  others  in  the  application 
of  machinery.  According  to  Mr.  Ellis  Barker  the 
United  States  of  America  use  in  numerous  identical 
industries  approximately  three  times  as  much 
horse -power  per  thousand  men  as  does  Great 
Britain.  He  states  that  the  coal  production  per 
annum  per  person  is  more  than  double,  principally 
because  British  miners  are  hostile  to  machinery 
and  are  bent  on  limiting  output.  His  figures  point 
to  the  easy  doubling  of  the  annual  income  of 
this  country  by  the  adoption  of  methods  in  use 
at  present  elsewhere.  The  hostility  to  machinery 
frequently  found  now  would  have  no  excuse  what- 
ever under  Economic  Moralism,  because  the  worker 
would  not  be  injured  in  any  way  by  its  introduction. 
The  guild  organization  of  workshop  and  factory 
would  be  much  superior  to  that  of  the  capitalist 
system.  Collective  control  would  be  superior  to 
capitalistic.  It  would  be  in  itself  an  educative 
force,  which  would  train  the  individual  to  pay 
regard  to  the  good  of  the  whole.  There  would 
not  be,  as  at  present,  .encouragement,  nay,  com- 
pulsion, to  look  after  number  one.  But  the 
backwardness  of  this  country  is  not  due  entirely 
to  the  working  classes,  or  even  chiefly.  The 
employing  classes  are  very  much  to  blame.  A 
telling  indictment  can  be  made  against  them  for 
neglecting  to  keep  themselves  abreast  with  the 
times    in    the    matter    of    technical    and    scientific 

249 


Economic  Moralism 

improvements,   and    in   industrial    and   commercial 
organization. 

Then  again  the  change  from  ,a  competitive  to 
a  co-operative  system  of  production  would  result 
in  an  enormous  saving.  There  is  little  need  to 
dwell  on  this  point,  as  it  has  formed  the  theme 
of  many  a  treatise.  It  is  generally  admitted,  and 
the  growth  of  the  Trusts  proves,  that  the  expendi- 
ture on  competitive  trade  warfare  is  unnecessary 
and  a  grievous  waste.  There  is  a  positive  waste 
in  advertising  and  canvassing  for  business,  in  the 
clerking  and  accounting  of  innumerable  competitive 
firms,  and  in  the  establishment  and  conduct  of 
competitive  businesses,  more  capital  being  invested 
than  actually  required  for  the  production  of  the 
goods  demanded,  unnecessary  railways  and  ships, 
unnecessary  factories  and  workshops,  unnecessary 
stores  and  showrooms.  Accompanying  this  there 
would  be  an  extraordinary  saving  owing  to  the 
improvement  in  the  quality  of  goods.  Goods 
would  not  be  made  simply  for  sale  and  profit, 
but  for  use,  and  their  use -value  would  be  ascer- 
tained, published,  and  guaranteed  by  the  producing 
guilds.  In  the  professions  there  would  be  an 
immense  saving  in  banking  and  insurance.  The 
present  complication  of  numerous  competing 
companies  and  their  branches  is  a  necessity  only 
under  Capitalism.  Not  a  hundredth  part  of  the 
present  staff  would  be  required  for  the  simple 
operations  of  banking  and  insurance.  But  above 
all,  would  the  lawyer  fraternity  be  diminished, 
as    well   as    Government    officials    connected    with 

250 


Transition  to  Economic   Moralism 

the  collection  of  revenue.      This  would  free  many 
for  useful  work. 

An  important  new  factor  in  the  production  of 
wealth  would  be  the  women  and  children.  Women 
are  engaged  on  much  domestic  work  that  is  most 
unprofitable  economically.  It  is  important  and 
indispensable,  but  if  women  were  able  to  get 
employment  for  some  hours  in  the  week  in  some 
well-organized  industry,  doing  effective  work  for 
a  full  wage,  they  would  not  waste  time  at  home 
producing  by  primitive  methods  at  prodigious  cost 
of  labour  what  could  be  made  much  more  easily 
and  cheaply  outside  by  modern  methods.  Children 
too  might  have  a  high  economic  value  earlier  in 
life  with  advantage   to   themselves. 

There  would  also  be  a  very  great  saving  effected 
by  the  prevention  of  loss  of  working  time  through 
strikes  and  bad  trade.  But  more  than  all  this 
saving  in  production  might  be  the  saving  in 
consumption.  One  of  the  lessons  of  the  War  is 
that  much  of  what  has  hitherto  been  considered 
necessary  expenditure  can  be  sacrificed  without 
reducing  the  real  comforts  and  pleasures  of  life. 
Professor  Marshall  calculates  that  perhaps  500 
million  pounds  sterling  annually  are  spent  by  the 
population  of  England  in  ways  that  do  little  or 
nothing  towards  making  life  nobler  or  truly 
happier.  And  Godwin  and  Owen  asserted,  even 
in  their  day,  when  industrial  arrangements  were 
so  much  inferior  to  the  present,  that  to  produce 
the  necessaries  of  life  would  require  only  half 
an  hour's  labour  per  day  ' 

251 


Economic  Moralism 

There  are  two  kinds  of  rules  of  conduct 
derivative  from  Relative  Ethics.  From  the  one 
kind,  guidance  is  got  for  conduct  in  the  circum- 
stances that  arise  out  of  unjust  economic  arrange- 
ments ;  from  the  other,  for  that  transformation 
of  the  social  system  which  is  necessary  if  the 
transition  from  Capitalism  to  Moralism  is  to  be 
a  conscious,  directed  movement.  The  latter  kind 
is  what  concerns  us  here. 

We  have  to  discover  the  lines  on  which  we  should 
proceed  in  the  task  of  establishing  the  economic 
framework  of  society  on  a  moral  basis,  and  some 
of  the  dangers  that  stand  in  the  way.  "Wie  have 
therefore  to  deal  with  the  actual  economic  changes, 
and  are  more  concerned  with  broad  principles  than 
with  details.  We  have  not  to  discuss  methods  of 
propaganda  or  the  means  by  which  the  people  are 
to  secure  political  and  industrial  power  and  capture 
the  citadels  of  Capitalism.  Neither  are  we  to 
consider  here  proposals  for  a  minimum  wage,  for 
shortening  of  hours,  better  factory  and  workshop 
legislation— in  short,  any  of  the  arrangements 
deemed  necessary  for  the  policing  of  Capitalism 
or  the  amelioration  of  its  obvious  evils.  Although 
some  of  these  may  be  of  value  to  the  workers, 
they  are  not  steps  to  Economic  Moralism  at  all, 
but  merely  to  what  Belloc  calls  "  the  Servile 
State."  We  have  to  confine  ourselves  simply  to 
the  economic  changes  that  are  distinctively  moralist, 
too  often   lost  sight  of  by  labour  politicians. 

Economic  justice,  abolishing,  as  it  would,  poverty 
and  all  its  evil  consequences,  and  opening  up  for 

252 


Transition  to  Economic   Moralism 

the  individual  and  the  race  illimitable  prospects 
of  happiness  and  progress,  calls  for  the  speediest 
materialization.  Little  as  the  fact  is  as  yet 
appreciated  by  the  people,  it  is  the  main  thing, 
if  not  the  one  thing,  needful  in  modern  civilization. 
It  alone  can  remove  the  incubus  that  crushes  the 
workers  of  the  world  and  is  responsible  for  all 
the  hideousness  of  modern  civilization,  namely,  the 
dead -weight  of  the  classes  that  subsist  on  rents 
and  dividends,  that  draw  unearned  income,  who, 
it  has  been  truly  said,  will  do  anything  but  come 
oft*  the  backs  of  the  workers.  As  has  over  and 
over  again  been  pointed  out,  these  classes  are 
able  to  exact  this  income  from  the  actual  producers 
and  rightful  owners  of  it,  because  they  have  legal 
possession  of  the  land  and  the  other  means  of 
life.  It  is  therefore  evident  that  the  land  and 
the  means  of  production  must  be  taken  out  of  their 
hands,  and  be  owned  and  controlled  by  the 
community  for  the  public  good.  Absolute  Ethics 
calls  for  the  expropriation  of  the  capitalist  classes. 
It  demands  the  cessation  of  dividends,  of  all  rent 
and  interest,  through  the  national  appropriation 
of  land  and  industrial  capital. 

In  connection  with  this  proposed  economic 
change  and  affecting  it  according  as  it  is  answered, 
there  is  an  important  question  in  ethics.  On  what 
terms  are  the  capitalists  to  be  dispossessed? 
Nearly  all  industrial  capital,  as  well  as  capital 
invested  in  land,  and  without  qualification  all  the 
net  returns  on  the  same,  are  the  proceeds  of  what 
must   be   termed,   bluntly,    robbery,   although   it  is 

253 


Economic   Moralism 

not  recognized  as  such  by  the  law  or  by  public 
opinion.  Now,  to  compensate  robbers  is,  on  strict 
moral  grounds,  not  permissible.  Of  course,  if 
any  person  could  prove  that  capital  owned  by 
him  had  been  saved  from  what  he  had  justly 
received  as  the  fruit  of  his  own  labour,  he  would 
have  a  legitimate  claim  on  the  balance  remaining 
after  deduction  of  all  the  rent,  interest,  and  profit 
that  he  had  ever  received.  But  with  that  exception, 
and  if  it  were  possible  to  leap  into  Economic 
Moralism  all  of  a  sudden,  the  ends  of  justice 
would  be  sufficiently  served  by  the  nationalization 
of  land  and  industrial  capital  without  compensa- 
tion, and  by  every  one  starting  afresh  and  on  equal 
footing  at  the  beginning  of  the  new  era,  all  those 
able  to  work  being  guaranteed  equal  income  for 
equal  effort,  and  the  infirm  being  sustained  by 
the  State. 

The  objection  to  this  proposal  is  not  that  it 
is  too  drastic,  but  that  the  work  of  reorganizing 
Society  all  at  once  on  a  Moralist  basis  is 
impossible,  unless  indeed  the  whole  attention  and 
desire  of  the  public  were  concentrated  on  that 
work  alone,  which  might  perhaps  happen  at  a 
time  of  great  revolutionary  ferment,  induced  by 
the  foolish  resistance  of  the  capitalist  classes  to 
legitimate  and,  from  the  point  of  view  of  ethics, 
too  modest  demands,  and  their  resort  to  arms 
and  militarist  methods  of  repression.  In  ordinary 
times    the    work    will    necessarily    proceed    slowly. 

Let  us,  then,  see  how  the  socialization  of  all 
industry   by  slow   degrees,   the  course  most   likely 

254 


Transition  to  Economic   Moralism 

to  be  taken,  should  be  carried  out,  and  how  the 
capitalist  should  be  dealt  with,  keeping  in  mind 
that  rent,  interest,  and  profit  are  morally  inde- 
fensible and  that  most  industrial  capital  has  been 
acquired  by  the  unjustifiable  exploitation  of  labour. 
Let  us  eliminate  the  opposition  of  interested  and 
ignorant  persons,  which  is  really  the  crux  of  the 
problem,  and  suppose  there  is  a  general  desire  to 
organize  Society  on  an  ethical  basis,  what  steps 
would  have  to   be  taken? 

It  is  calculated  that  the  value  of  the  land 
and  capital  of  Great  Britain  amounts  to  about 
£9,000,000,000  sterling.  It  is  therefore  clear  that 
it  is  beyond  the  power  of  the  working  people  to 
buy  their  freedom,  to  compensate  the  capitalist, 
out  of  their  wages  ;  and  they  ought  not  if  they 
could.  The  only  possible  way,  and  the  only  way 
justified  by  ethics,  is  what  the  capitalist  classes 
call  "  confiscation,"  which,  however,  ought  to  be 
called  "  restitution,"  and  it  will  no  doubt  take,  as 
it  ought  to  take,  the  form  of  special  taxation  of 
the  whole  capitalist  class  for  the  purpose  of  com- 
pensating individual  capitalists  whose  property  is 
to  be  nationalized. 

The  method  of  nationalization  commonly  thought 
of  is  the  occasional  purchase  of  an  industry  by  the 
Government,  the  purchase  price  being  raised  by 
a  loan.  But  interest  must  be  paid  on  the  loan,  and 
therefore,  until  the  loan  is  paid  off,  the  industry 
cannot  be  said  to  be  in  actual  fact  socialized. 
This  cannot  be  too  much  emphasized.  The  rate 
at  which  its  real  and  complete  socialization  can  be 

255 


Economic   Moralism 

effected  depends  on  the  difference  between  the 
profits,  if  any,  and  the  loan  interest. 

But  when  the  people  become  convinced  of  the 
immorality  of  the  capitalist  system,  they  will  not 
be  satisfied  with  this  slow  process.  They  will 
not  be  content  with  this  sham  moralism  based  on 
loans  from  capitalists.  They  will  insist  on  the  real 
expropriation  of  the  capitalist  class,  as  well  as 
the  national  organization  of  the  various  branches 
of  industry.  This  can  be  done  without  inflicting 
any  real  hardship  on  the  capitalist  class.  To  those 
acquainted  with  the  wrongs  inflicted  by  that  class 
on  the  working  class  it  may  seem  unnecessary 
to  give  any  consideration  to  the  feelings  of  those 
who  have  been  dominant  for  so  long.  But  to  the 
impartial  mind  it  does  not  seem  fair  to  single  out 
the  owners  of  the  capital  of  the  industries  nation- 
alized first,  and  deprive  them  of  their  capital  or 
even  of  their  dividends  without  compensation, 
letting  other  capitalists  go  scot-free.  The  whole 
capitalist  class  should  have  special  taxation  levied 
on  it  for  the  purpose  of  buying  out  the  particular 
capitalists  whose  capital  is  being  dealt  with.  No 
section  of  that  class  should  be  subjected  to  excep- 
tional treatment.  This  is  the  orderly  way  of 
moralizing  the  economic  system. 

Let  us  illustrate  by  a  concrete  case.  The 
nationalization  of  the  railways  is  frequently 
spoken  of.  Their  value  is  estimated  at  about 
£950,000,000.  The  average  return  on  this  is  said 
to  be  about  4  per  cent.  It  is  doubtful  whether  even 
the  Government  could  raise  a  loan  of  that  amount 

256 


Transition  to   Economic   Moralism 

much  under  this  figure,  although  after  national- 
ization is  well  begun  cheaper  money  will  be  got 
owing  to  the  narrowing  of  the  field  for  investment. 
But  even  if  a  profit  of  i  per  cent  could  be  made 
on  the  transaction,  and  it  were  all  used  to  redeem 
the  loan,  it  would  take  nearly  three  generations  to 
pay  off  the  bondholders  and  make  the  railways 
really  national  property.  The  fact  cannot  be 
disguised  that  Economic  Moralism  cannot  be 
brought  about  at  a  reasonable  speed  without  taxing 
out  the  capitalist.  You  cannot  make  omelettes 
without  breaking  eggs.  Very  heavy  death  duties 
on  large  estates  and  a  special  income  tax  must  be 
levied,  rising  to  a  very  high  figure  on  large 
incomes.  This  revenue  would  have  to  be 
earmarked  for  the  redeeming  of  the  debt  on  the 
nationalized  industries.  This  is  the  fairest  treat- 
ment the  capitalist  classes  can  expect  to  receive — 
fairer  than  their  due.  They  are  all  put  on  the  same 
footing,  none  thrown  to  the  wolves  to  save  the 
others,  and  they  are  even  allowed  an  extension 
of  time  in  which  to  continue  their  exploitation  of 
the  workers.  They  receive  back  their  capital  in 
full,  and  have  only  their  unearned  income  curtailed. 
The  rate  of  expropriation  need  not  be  moderated 
in  consideration  of  the  capitalists  themselves, 
because  in  the  process  it  is  not  necessary  to  deprive 
them  of  any  reasonable  comforts  and  luxuries. 
It  should  only  be  regulated  by  the  effect  (and  this 
brings  us  to  the  next  and  more  important  point) 
on  the  workers  engaged  in  supplying  the  wants  of 
the  capitalist  classes,  or,  to  put  it  in  another  way, 

257  R 


Economic   Moralism 

by  the  ability  of  the  Government  to  find  work  or 
income  for  those  who  would  be  thrown  out  of 
employment  by  the  necessary  change  in  the  habits 
of  the  rich.  For  there  can  be  no  doubt  that  heavy 
taxation  of  the  rich,  by  which  the  change  must  be 
brought  about,  would  mean  the  reduction  of  their 
purchasing  power  and  the  curtailment  of  their 
demand  for  luxuries,  and  this  would  react  on 
the  producers  of  such  luxuries  and  reduce  their 
earnings  or  throw  them  out  of  work.  It  is  the 
workers,  then,  who  will  have  to  be  considered  in 
the  expropriation  of  the  capitalists,  not  the 
capitalists  themselves.  And  in  this  connection 
there  is  the  further  reason,  from  the  Moralist  point 
of  view,  that  if  the  workers  were  allowed  to  suffer, 
their  instinct  of  self-preservation  would  drive  them 
to  join  the  reaction.  Even  without  such  expro- 
priation there  is  always  a  section  of  the  population 
unable  to  get  work,  and  yet  with  the  present 
comparatively  insignificant  numbers,  the  problem 
of  finding  work  for  them  has  not  been  solved.  It 
will  become  a  much  more  serious  matter  when  the 
expropriation  of  the  capitalist  begins.  This  makes 
the  solution  of  the  right-to-work  problem  the  most 
important  in  what  is  called  practical  politics. 

The  present  course  of  legislation  indicates  that 
the  first  steps  in  the  amelioration  of  the  condition 
of  the  working  classes  are,  as  Belloe  points  out, 
in  the  direction  of  greater  security,  in  the  direction 
of  compensation  for  the  loss  of  earning  power,  not 
only  in  old  age  and  in  ill  health,  but  also  through 
unemployment.     The  initial  stages  of  the  movement 

258 


Transition  to  Economic  Moralism 

have  been  passed,  and'  although  what  has  been 
done  is  most  inadequate,  it  is  certain  that  a  rapid 
advance  will  be  made.  This  is  only  a  prudent 
method  of  bolstering  up  Capitalism  by  increasing 
the  comfort  and  contentment  of  the  working 
classes,  and  of  blinding  them  to  the  fundamental 
and  ineradicable  defects  of  the  system  under  which 
they  are  robbed  of  the  greater  part  of  the  wealth 
they  produce.  But  such  reforms  will  clear  the 
way  for  others,  even  more  important,  which,  how- 
ever, will  have  nothing  to  recommend  them  to 
the  capitalist  classes.  The  arrangements  neces- 
sary to  meet  the  claims  of  old  age  and  invalidity 
present  few  difficulties,  but  it  is  otherwise  with 
the  question  of  unemployment,  the  question  under 
consideration,  the  evils  of  which  the  working- 
classes  have  always  had  to  suffer  more  or  less 
under   Capitalism. 

An  economic  problem  like  this  cannot  be  dealt 
with  here  except  in  the  most  perfunctory  way. 
Perhaps  the  question  we  can  discuss  most  usefully 
is  that  as  to  the  probable  extent  of  the  displace- 
ment of  labour,  and  whether  there  would  not  be 
speedy  compensation  for  it  in  other  directions — that 
is,  whether  the  normal  condition  of  labour  would 
not  be  soon  resumed.  Let  us  deal  with  the  concrete, 
and  see  what  would  be  done  with  the  income  tax 
exacted,  say,  for  the  purchase  of  railways.  Certain 
railway  shareholders  would  be  bought  out  by  public 
money  raised  by  the  taxation  of  all  capitalists. 
What  would  they  do  with  the  money?  And  what 
would   be  done  with  the  money  formerly  paid  to 

259 


Economic  Moralism 

them  in  dividends?  If  the  latter  were  used  to 
raise  railway  workers'  wages  or  reduce  their  hours 
by  the  employment  of  more  men,  the  general 
demand  for  labour  employable  by  that  money 
would  remain  the  same,  but  the  purchasing  power 
would  be  used  by  a  different  class,  and  would 
employ  the  producers  of  necessaries  and  comforts 
for  the  workers  instead  of  the  producers  of 
luxuries  for  the  well-to-do.  This  item  would, 
however,  be  comparatively  small.  Again,  what 
would  be  done  by  the  railway  shareholders,  who 
would  now  have  in  the  form  of  liquid  capital  that 
which  income-tax  payers  would  for  the  most  part 
have  spent  in  supplying  their  wants?  They  would 
try  to  find  investments  for  it.  One  of  two  things 
would  happen.  They  would  buy  those  investments 
from  people  who  would  sell  them  either  to  spend 
their  capital  on  their  personal  pleasures  or,  what  is 
more  probable,  in  order  to  re -invest  it  in  new 
enterprises.  In  each  case  the  same  amount  of 
labour  would  be  employed  in  the  end,  but  it  would 
not  be  of  the  same  kind  as  that  formerly  em- 
ployed. Much,  however,  of  the  capital  might  be 
sent  abroad  to  new  fields  of  investment.  How 
would  that  affect  labour?  If  sent  abroad,  the 
result  would,  before  long,  be  an  equivalent  activity 
in  the  export  trades  of  the  country,  so  that  in  the 
end  there  would  be  no  falling  off  in  the  total 
demand  for  labour.  In  the  meantime,  however, 
labour  would  suffer. 

The    economic    effects    of    the    transaction    are 
certainly  difficult  to  forecast.     All  that  can  safely 

260 


Transition  to  Economic  Moralism 

be  said  is  that  in  any  case  there  would  be  a  great 
displacement  of  labour  temporarily,  and  that  a 
considerable  time  would  elapse  before  affairs  would 
settle  down.  Not  only  much  discomfort,  but  actual 
poverty  and  misery,  would  result  until  the  dis- 
placed workers  found  other  employment,  unless 
special  assistance  were  organized.  It  becomes 
therefore  a  matter  of  the  very  first  importance  to 
guarantee  against  pecuniary  loss  those  for  whom 
no  work  can  be  found.  All  economic  change  under 
Capitalism  has  hitherto  caused  untold  suffering  to 
the  workers.  The  introduction  of  machinery  and 
new  industrial  methods  has  always  been  accom- 
panied by  unemployment.  The  transition  from 
Capitalism  to  Moralism  will  have  the  same  results, 
if  no  provision  be  made  to  prevent  it.  Unless 
effective  palliatives  therefore  are  instituted,  all 
measures  of  genuine  moralist  reform,  which  will 
necessarily  increase  unemployment  temporarily,  will 
receive  serious  opposition  from  large  sections  of 
the  workers  themselves.  It  is  of  course  possible 
to  exaggerate  the  extent  of  unemployment  likely 
to  be  caused  by  the  gradual  introduction  of  Moral- 
ism, and  opponents  will  not  fail  to  exaggerate  it. 
It  may,  however,  be  pointed  out  that  a  given  tax 
on  the  rich  has  a  disturbing  effect  on  labour  only 
in  the  initial  stages.  It  is  when  the  tax  is  first 
imposed  that  the  trouble  is  felt.  After  a  time 
economic  adjustment  follows  and  permanent 
equilibrium  ensues.  If  therefore  the  tax  is  made 
permanent,  labour  will  not  suffer  in  any  way  after 
the  first  period  is  past,  but  considering  the  object 

261 


Economic   Moralism 

of  the  tax,  will  benefit.  Again,  owing  to  the  sub- 
division of  labour  carried  on  now  to  a  greater 
extent  than  ever  before,  labour  has  become  more 
fluid.  Workers  can  pass  from  one  industry  to 
another,  and  become  efficient  after  very  short 
experience.  They  have  learned  in  the  hard  school 
of  life  to  adapt  themselves  to  changing  industrial 
conditions.1 

The  best  way  of  preventing  hardship  to  the 
workers  in  this  transition  period  is  a  problem 
the  solution  of  which  will  have  a  determining  effect 
on  our  conclusions  as  to  the  manner  in  which 
industries  ought  to  be  moralized.  They  will  not 
likely  be  moralized  in  any  rational  order,  at  least 
at   the   beginning    of   the   transition   period.      The 

1  The  disorganization  of  the  transition  period  will  probably 
be  not  so  great  as  has  been  generally  feared  During  the  War 
we  are  seeing  a  tremendous  upheaval  and  disorganization, 
or  rather  reorganization,  in  our  industrial  life.  The  whole 
character  of  the  industry  of  the  nation  is  being  suddenly 
changed,  and  yet  there  is  no  lack  of  employment  or  good 
wages,  and  therefore  no  need  for  the  communism  sometimes 
required  in  unusual  circumstances,  such  as  those  connected 
with  a  shipwreck  or  a  besieged  city.  This  is  a  movement 
in  our  industrial  life  closely  analogous  to  that  of  a  sudden 
jump  into  a  new  social  system.  One  of  the  most  important 
lessons  of  the  War  is,  that  if  everybody  is  by  courageous  State 
action  employed  on  useful  work  at  good  wages,  there  need 
be  no  suffering  and  disorder  in  the  transition  period.  The 
spending  of  the  wages  will  provide,  and  fix  automatically,  the 
demand  for  labour  and  the  direction  in  which  it  is  to  be 
employed. 

262 


Transition  to  Economic  Moralism 

process  will  depend  greatly  on  the  political  and 
industrial  exigencies  of  the  moment,  and  the 
Moralist  aim  ought  to  be  to  take  full  advantage 
of  every  tendency  towards  the  ideal,  whether  the 
industry  involved  be  the  most  important  or  not. 
Even  supposing  that  real  socialization  or  morali- 
zation  is  not  immediately  adopted,  and  that  it  is 
merely  the  sham  moralism  based  on  capitalist  loans, 
and  supposing  also  that  the  economies  and  the 
profits  are  too  small  to  permit  of  the  loan  being 
paid  off,  there  is  still  a  great  advantage  in  having 
all  or  as  many  industries  as  possible  organized 
under  public  control,  for  when  the  actual  socializa- 
tion begins — that  is,  the  cessation  in  whole  or  in 
part  of  interest — not  only  would  the  benefits  of 
socialization  or  moralization  be  secured  to  the 
general  body  of  the  workers,  but,  what  is  of  even 
greater  importance,  arrangements  could  be  made 
in  perhaps  the  only  effective  way  to  prevent  suffer- 
ing among  the  workers  thrown  out  of  work  by  the 
change  in  the  demand.  For  with  industry  or- 
ganized for  the  public  benefit  instead  of  being  in 
the  chaotic  state  in  which  it  is  under  Capitalism, 
work  and  wages  could  easily  be  found  for  every 
one.  To  do  this  under  Capitalism  is  next  to 
impossible,  and  to  place  a  further  tax  on  the  capi- 
talist for  the  purpose  of  supporting  the  unemployed 
in  addition  to  the  confiscatory  tax,  which  by 
hypothesis  is  the  cause  of  the  trouble,  is  only  to 
intensify  it,  and  the  reformer  is  landed  in  a  vicious 
circle. 

It  seems  reasonable  to  socialize  or  moralize  first 
263 


Economic  Moralism 

the  industries  of  vital  importance  to  the  community, 
those  concerned  with  food,  fuel,  clothing,  housing, 
and  communications.  Great  strides  in  the  munici- 
palization of  gas,  water,  electrical  supply,  and 
tramways  have  been  made,  as  yet  for  the  most  part 
of  the  sham  kind  based  on  loans,  for,  as  Belloc 
truly  says,  there  has  been  no  confiscation  and 
therefore  no  real  socialization  or  moralization.  As 
regards  nationalization,  public  opinion  seems  to  be 
inclined  to  select  three  industries  for  first  atten- 
tion, namely,  the  railways,  the  mines,  and  the  land. 
We  shall  therefore  consider  these.  Opposition 
must  be  offered  to  partial  nationalization — that  is, 
to  the  nationalization  of  one  or  two  railway  systems 
or  a  few  coal-mines.  The  State  is  certain  to  be 
saddled  with  the  worst  at  the  highest  price,  and 
the  necessarily  unprofitable  returns  would  be 
pointed  to  by  the  reactionaries  as  the  natural  result 
of  State  ownership  and  management.  Neither 
must  extravagant  prices  be  paid.  The  income 
allowed  bondholders  must  be  based  on  what  they 
have  been  receiving  and  on  what  they  might 
reasonably  be  expected  to  continue  to  receive  under 
Capitalism.  The  capital  sum  to  be  paid  them 
when  bought  out  should  be  based  on  that  income, 
due  deduction  being  made  for  State  guarantee  and 
security. 

Furthermore,  when  nationalized,  industries  con- 
ducted in  the  Capitalist  system  must  be  gradually 
approximated  to  the  Moralist  ideal.  A  complete 
transformation  of  economic  arrangements  on  a 
truly   colossal   scale   must   take   place   in  order  to 

264 


Transition  to  Economic  Moralism 

ensure  the  materialization  of  our  ideal  of  liberty, 
equality,  and  fraternity,  and  in  order  to  work  surely 
in  the  right  direction  we  must  have  a  clear  idea  of 
the    new     economic     system.       Under    Economic 
Moralism    how    are    the    various    industries    to    be 
organized    and    managed?       What    share    in    the 
management  of  any  one  of  them  should  its  workers 
have  and  what  share  the  general  community?    How 
is  capital  to  be  raised  for  new  industries  or  new 
developments  of  old  ones?    How  are  prices  to  be 
determined?    How  is  economic  rent  to  be  equitably 
distributed    (the  solution  of  which  problem  affects 
the  incidence  of  the  carriage  of  commodities  and 
so  the  working  of  railways)?    How  are  wages  to 
be    determined     (wages    of    workers    of    different 
trades  and  of  those  in  the  same  trade)?    How  is 
technical  education  to  be  given  and  at  whose  cost? 
What  is  the  dividing  line  between  legitimate  and 
illegitimate  taxation?    And  so  on.     An  attempt  has 
been   made   in   the   preceding   chapters   to   answer 
these  and  many  similar  questions,   and  until  they 
have  been  answered  we  cannot  well  indicate  how 
nationalized  industries  under  Capitalism  are  to  be 
gradually    approximated    to    the    Moralist    ideal. 
Once  nationalized,   they  must,  however,   before  all 
things   become   responsible    for    the   proper   main- 
tenance  of   those   employed   in   them  and   for   the 
proper  support  of  their   infirm  and  aged  workers 
until    sufficient    national    support    is    given    them. 
Labour  must  be  the  first  charge  on  them.     As  the 
bondholders  are  paid   off,  a  profit  will  accrue,   to 
which  must  be  added  the  saving  effected  by  the 

265 


Economic   Moralism 

abolition  of  sinecures  held  by  directors  and  others, 
and  the  economies  resulting  from  the  cessation  of 
competition  and  from  the  institution  of  effective 
organization.  This  will  be  available  for  giving 
the  State-employed  workers  wages  and  conditions 
of  labour  substantially  over  the  ordinary  standard. 
At  the  same  time,  in  all  State  industries  unneces- 
sarily high  salaries  must  be  discontinued.  High 
salaries  do  not  always,  or  even  often,  indicate  high 
economic  value.  They  are  generally  attached  to 
posts  for  friends  of  influential  people,  or  to  bribe 
the  clever  and  therefore  dangerous  wage -earners 
to  become  traitors  to  their  class.  The  tendency 
ought  rather  to  be  in  the  direction  pointed  to  by 
Bernard  Shaw  in  his  crude  but  startling  and  illum- 
inating thesis  on  equality  of  income.  Equal 
opportunity  for  equal  income  for  equal  effort  should 
be  our  goal. 

Benefit  to  the  workers  in  the  industries  national- 
ized would  afford  a  very  good  object-lesson  to 
the  public  of  the  advantages  of  nationalized 
industry,  although  there  is  always  the  fear  of  envy 
causing  ill-conditioned  workers  in  non-nationalized 
industries  to  object  to  the  higher  wages  and  better 
conditions  instead  of  agitating  for  the  nationaliza- 
tion of  their  own  industries.  This  done,  that 
section  of  the  public  which  makes  use  of  the 
industries  should  derive  benefit  from  nationaliza- 
tion. So  long',  however,  as  the  general  business 
of  the  country  remains  in  private  hands,  any 
reduction  in  rates  or  prices  would  in  most  cases 
never  benefit  the  public  at  all,  but  only  enrich  the 

266 


Transition  to  Economic  Moralism 

commercial  classes,  and  such  result  must  be 
avoided.  The  difficulty  of  getting  the  benefits 
mentioned  to  reach  all  sections  of  the  public  is 
another  proof  of  the  necessity  of  the  State  taking 
over  industry  after  industry  as  rapidly  as  possible, 
even  if  no  immediate  profit  could  be  made,  for 
only  thus  can  any  benefits  be  secured  to  the  people. 
It  is  doubtful  whether  any  wage -earners  except 
those  in  State  employment,  unless  they  were  well 
organized,  would  be  benefited  except  for  a  very 
short  time  by  the  reduction  of  prices,  because  with 
an  increase  in  the  purchasing  power  of  wages 
which  would  result  from  the  lowering  of  prices, 
the  wages  of  those  in  private  employment  would 
fall  in  the  end,  and  thus  the  capitalists  would 
swallow  up  the  benefits.  On  the  other  hand,  the 
wages  of  the  State-employed  would  not  be  reduced, 
provided  of  course  that  the  people  were  vigilant 
and  insisted  on  justice  being  done.  The  trouble, 
unfortunately,  is  that  the  people  lazily  let  every- 
thing be  controlled  by  the  capitalist  classes.  The 
indifference  and  the  slavish  character  of  the 
working  people  is  the  greatest  of  all  the  dangers 
the  reformer  has  to  face. 

The  extra  profits,  after  a  certain  point  is  reached, 
should  be  ear -marked  for  paying  oft"  the  bond- 
holders at  a  greater  rate,  but  not  by  any  means 
for  reducing  the  taxation  on  the  capitalist  class 
exacted  for   purposes  of  socialization. 

Finally,  as  has  already  been  indicated,  in  all 
State -owned  industries  arrangements  must  be  made 
for  the  easy  passage   from  the  present  system  of 

267 


Economic  Moralism 

working  them  to  that  required  by  the  ideal  of 
Absolute  Ethics,  and  as  one  of  the  means  to 
this  end,  parallel  with  the  ordinary  commercial 
accounting,  there  should  be  a  system  of  calculating 
all  expenses  in  terms  of  time,  and  the  accounting 
must  be  such  as  will  bring  true  economic  values 
to  light. 

With  these  general  principles  before  us,  let  us 
now  briefly  consider  the  nationalization  of  railways, 
mines,  and  the  land. 

With  regard  to  the  railways,  the  improvement 
of  the  condition  of  the  workers  could  easily  enough 
be  arranged  as  an  economic  proposition.  But  how 
to  benefit  the  public  by  the  reduction  of  fares  and 
freights?  Under  Capitalism  any  reduction  in  rates, 
except  passenger  fares,  would  probably,  as  has 
already  been  indicated,  never  benefit  the  public, 
but  would  only  increase  the  profits  in  capitalist - 
owned  industries  and  commercial  concerns. 
Unless  the  reduction  can  be  made  direct  to  the 
members  of  the  public,  it  will  be  absorbed  by  the 
capitalists  who  are  still  able  to  exact  a  toll  from 
industry.  Capitalist  undertakings,  at  all  events 
those  on  a  large  scale,  ought  not  to  get  reductions 
at  all,  unless  they  could  prove  that  a  reduction 
would  alone  save  them  from  ruin,  when  their  claims 
would  become  worthy  of  consideration,  and  in  such 
case  a  Government  receiver  should  be  placed  in 
charge.  Small  farmers,  tradesmen,  shopkeepers, 
all  those  barely  above  the  wage -earning  class,  and 
private  individuals,  should  get  first  consideration — 
in    short,    all    those    who    get    least    consideration 

268 


Transition  to  Economic  Moralism 

from  railways  now.  But  in  no  case  should  the 
reduction  bring  the  rates  below  the  economically 
justifiable  charge.  In  so  far  as  it  is  not  done  by 
the  railway  companies  at  present,  the  State  railway 
officials  must  ascertain  exactly  the  rates  that  ought 
to  be  charged  on  each  line  for  every  class  of  goods, 
and  for  passengers,  in  order  to  cover  the  expense 
of  working  that  class  of  goods  and  the  passenger 
traffic  over  that  line.  In  many  cases  it  will  be 
found  that  certain  districts  and  certain  goods  are 
being  charged  too  much  and  others  too  little,  the 
former  because  of  little  or  no  competition,  the 
latter  because  of  too  much.  Many  districts  in  this 
way  have  at  present  a  distinctly  false  economic 
value.  This  will  have  to  be  rectified  under 
Economic  Moralism,  but  even  then  any  alteration 
must  be  made  with  great  caution,  only  after 
searching  inquiry  and  careful  consideration. 
Although  built  on  insecure  foundations,  industries 
depending  on  low  railway  rates  cannot,  because 
of  the  capital  invested  in  them  directly  and 
indirectly,  and  the  labour  employed  therewith,  be 
transferred  to  the  proper  localities  without  much 
loss,  and  this  must  be  set  against  the  gain.  Under 
Economic  Moralism,  as  soon  as  it  can  profitably 
be  done,  such  anomalies  will  be  rectified,  but 
without  causing   loss    to    private   persons. 

Now  as  regards  the  mines.  The  bondholders 
will  receive  interest,  and  there  will  probably  be 
little  profit,  if  any,  but  as  in  the  case  of  the  rail- 
ways, whatever  there  might  be,  ought  to  be  used 

269 


Economic  Moralism 

first  for  adequate  improvement  of  the  miners'  condi- 
tions, then  for  the  benefit  of  the  consumers  of  coal, 
and  the  balance  for  buying  out  the  bondholders, 
so  hastening  the  progress  towards  genuine  moral - 
ization.  If  there  should  be  no  profit,  and  yet 
miners'  conditions  must  be  improved,  prices  would 
require  to  be  raised.  This  would  have  to  be  done 
with  caution  as  regards  the  foreign  trade.  The 
cry  that  the  foreign  trade  is  endangered  is  raised 
whenever  coal -miners  agitate  for  better  conditions. 
With  the  industry  entirely  in  private  hands,  it  is 
impossible  to  say  whether  there  is  truth  in  the  cry 
or  not.  And  it  is  this  that  makes  the  task  of 
Parliament  so  difficult  when  demands  are  made 
for  legislative  measures  restricting  the  working 
hours  or  instituting  higher  wages.  Under 
Economic  Moralism  or  with  the  industry  national- 
ized under  Capitalism  there  would  be  less  difficulty. 
It  would  be  possible  as  regards  the  home 
consumption  to  raise  prices,  for  foreign  competi- 
tion would  be  excluded.  .With  the  foreign  export 
trade  it  would  be  a  mOre  difficult  matter,  for 
foreign  competition  would  have  to  be  considered, 
and  the  foreign  trade  might  give  employment  to 
a  very  large  section  of  the  population.  If  there 
were  no  other  way  of  employing  that  part  of  the 
population,  it  might  be  found  necessary  to 
continue  production  for  export  at  the  old  prices. 
But  the  workers  could  not  be  refused  their  full 
wages,  and  the  loss  in  the  industry  would  have  to 
be  charged  against  the  State,  to  be  covered  by 
general  taxation  or  preferably  by  taxation  of  the 

270 


Transition  to  Economic  Moralism 

capitalist  class.  In  some  mines  wages  below  the 
usual  standard  must  be  paid,  it  is  said,  if  they 
are  to  be  worked  at  all.  It  seems  unlikely  that 
the  miners  accept  these  low  wages  because  they 
are  tied  in  any  way  to  such  districts  except  by 
the  difficulty  of  finding  work  elsewhere.  So  long 
as  coal  is  produced  there  at  sufficiently  low  prices, 
the  demand  for  coal  supplied  from  these  districts 
will  be  prevented  from  being  directed  to  other 
mines  that  really  have  an  economic  excuse  for 
existence.  If  the  low-grade  mines  be  closed,  the 
demand  will  be  directed  elsewhere  for  coal  and 
consequently  for  the  displaced  labour.  It  might 
be  inadvisable  to  close  the  mines  if  the  result 
wouid  be  the  ruin  of  industries  depending  on  cheap 
coal.  Under  Capitalism,  if  a  mine  does  not  pay 
and  is  not  likely  ever  to  pay,  it  is  closed  and  the 
industries  dependent  on  it  are  ruthlessly  left  to 
their  fate,  and  so  long  as  these  industries  remain 
in  private  hands  it  seems  quixotic  for  the  State 
to  show  any  mercy  to  them  by  running  a  State - 
owned  industry  at  a  loss  for  their  benefit.  But 
out  of  such  a  predicament  as  that  supposed  there 
are  only  two  ways  of  escape.  Either  the  State 
must  be  prepared  to  support  the  unemployed  until 
work  is  found  for  them  elsewhere,  or  it  must 
recover  from  the  capitalist  taxpayers  the  loss 
sustained  in  working  certain  mines,  for  it  would 
be  unjust  to  collect  it  simply  from  consumers  of 
coal  in  proportion  to  their  consumption,  and,  more- 
over, in  so  far  as  it  was  collected  from'  capitalist 
producers  it  would  be  passed  on  to  the  public  by 

271 


Economic  Moralism 

enhanced  prices.  But  not  only  the  effect  on  the 
workers  is  to  be  considered  in  the  transition  period 
but  the  loss  of  capital.  Neither  the  one  nor 
the  other  aspect  gets  any  consideration  under 
Capitalism'.  Capitalists  ruin  capitalists  and 
workers  with  equal  indifference.  But  under 
Economic  Moralism,  and  even  in  the  transition 
period,  no  economic  change  ought  to  be  made 
without  consideration  of  the  loss  of  capital  involved 
in  the  change.  Such  indirect  loss  must  be  set 
against  the  direct  gain.  Certainly,  if  believers  in 
Economic  Moralism  succeeded  in  the  transition 
period  in  controlling  the  State,  they  would  have 
the  power  to  treat  capitalists  according  to  the 
principles  of  capitalist  political  economy  and 
commercial  morality,  and  ruthlessly  use  their  power 
to  crush  them  out  and  thus  force  them  to  sell  their 
business  for  an  insignificant  sum'.  But  this  seems 
hardly  capable  of  justification  from  a  moral  stand- 
point, for  although  these  capitalists  are  really  in 
an  economically  and  ethically  unsound  position, 
and  are  not  entitled  to  receive  better  treatment 
under  Moralism  than  under  Capitalism,  yet  they  too 
are  in  a  sense  the  victims  of  a  vicious  system,  and 
as  such  ought  to  receive  compensation,  not  from 
the  general  community  but  from  the  whole  capital 
class. 

When  a  profit  on  the  mines  begins  to  appear 
owing  to  the  buying  out  of  the  bondholders  and 
after  the  miners  have  received  proper  considera- 
tion, reduction  in  the  price  of  household  coal 
through  State  distributive  depots  should  be  made, 

272 


Transition  to  Economic  Moralism 

also  on  that  supplied  to  State  industries,  but  not  at 
all  on  coal  supplied  to  industrial  concerns  still 
in  the  hands  of  capitalists,  as  there  would  be  no 
guarantee  that  the  public  would  be  benefited  by, 
such  a  reduction. 

Nationalization  of  the  land  is  often  glibly  spoken 
of,  but  the  difficulties  connected  with  the  nationali- 
zation of  mines  and  railways  appear  insignificant 
when  compared  with  those  involved  in  land 
nationalization,  although  on  close  scrutiny  they 
are  quite  surmountable. 

Land  on  which  buildings  are  erected  could  easily 
enough  be  dealt  with.  Rents  and  feu-duties  would 
be  paid  to  the  State  instead  of  to  private  persons, 
the  State  paying  the  agreed  upon  interest  to  the 
former  proprietors  and  buying  them  out  as  far 
as  circumstances  would  permit.  The  question  of 
rent  under  Economic  Moralism  has  been  very  fully 
considered,  but  the  principles  laid  down  could  not 
be  applied  in  their  entirety  in  the  transition  period. 
As  the  landowners  are  gradually  bought  out  by 
the  taxation  levied  on  the  capitalist  class  in  general, 
a  surplus  will  remain  in  the  hands  of  the  State, 
which  will  have  to  be  disposed  of.  This  must  not 
be  used  for  the  ordinary  expenses  of  the  State, 
such  as  have  been  mentioned  in  the  discussion 
on  legitimate  taxation,  but  must  be  devoted  to 
the  immediate  benefit  of  the  people  from  whose 
pockets  it  has  come.  But  can  this  be  done?  If 
all  buildings  were  nationalized  at  the  same  time 
as  the  land,  and  rent  charged  for  them  as  under 

273  s 


Economic   Moralism 

Capitalism,  the  rents  of  dwelling-houses  could  be 
reduced,  and  the  people  would  get  direct  and 
immediate  pecuniary  benefit,  full  rent  being  still 
collected  on  all  other  buildings,  factories,  shops, 
warehouses,  etc.,  as  reductions  in  such  cases  would 
simply  increase  the  profits  of  the  capitalists.  But 
unless  house  property  is  nationalized  at  the  same 
time  it  is  difficult  to  see  how  people  could  be 
benefited,  for  if  the  State  returned  them  part  of 
what  they  had  already  paid  to  private  persons 
as  house  rent,  rents  would  be  almost  certain  to 
rise  and  the  latter  would  benefit.  One  plan  would 
be  to  give  fixity  of  rents,  or  rather,  prohibit  the 
increase  of  rents,  and  then  allow  remission  of 
taxation  or  rates  based  on  rents.  But  even  then 
competition  would  force  down  the  wages  of  labour 
engaged  in  private  employment  as  the  purchasing 
power   of   wages    increased. 

Any  surplus  should  be  used  for  the  more  rapid 
buying  out  of  the  capitalists.  One  of  the  great 
dangers  in  the  transition  will  be  the  temptation 
to  dispose  of  all  such  surplus  for  communistic 
purposes,  and  this  must  be  avoided  at  all  hazards 
as  being  the  most  pernicious  solution  of  the 
problem,  leading  as  it  would  to  a  social  system 
almost  as  irrational  and  iniquitous  as  Capitalism 
itself. 

The  nationalization  of  agricultural  land  does  not 
necessarily  mean  the  nationalization  of  the  agri- 
cultural industry,  although  it  would  lead  up  to 
it.      It  would   simply  mean  that  the  State  would 

274 


Transition  to  Economic  Moralism 

take  the  place  of  the  landowners,  and,  like  them, 
manage  estates  and  draw  rents  through  the  agency 
of  factors  or  their  substitutes.  The  steadily  grow- 
ing surplus  in  this  department  would'  best  be  used 
to  buy  out  the  farmers,  organize  them'  into  a  guild, 
and  employ  them  to  cultivate  the  crops  ascertained 
by  the  newly  instituted  guild  as  necessary  to  meet 
the  national  demand.  Between  the  consumer  and 
the  raw  farm  produce  are  various  industries  that 
would  have  to  be  nationalized  in  order  to  secure  to 
the  public  the  benefit  of  reduced  prices,  namely 
flour-mills,  bakehouses,  creameries,  breweries, 
distilleries,  etc.  After  the  process  is  begun  there 
will  necessarily  be  further  developments  precipi- 
tated one  after  the  other  with  ever  accelerating 
speed. 

But  before  this  could  go  far  it  would  be  neces- 
sary to  organize  and  socialize  the  distributing 
agencies.  A  great  deal  has  already  been  done  by 
co-operative  societies  to  introduce  a  rational  and 
economical  system  of  distribution  of  products.  In 
some  places  they  cover  a  very  large  part  of  the 
field.  The  private  retail  trader  must  be  eliminated 
to  make  way  for  Economic  Moralism.  He  is 
being  eliminated  now  by  a  process  very  painful 
for  him,  because  the  system  on  which  his  existence 
depends  is  economically  unsound  and  is  being  re- 
placed by  a  better  even  under  Capitalism.  If  he 
throws  in  his  lot  with  Moralism,  he  will  receive 
compensation  just  as  well  as  the  landowners  and 
factory  owners.  If  Moralism  be  delayed,  he  will 
be  gradually  pushed  to  the  wall  and  ruined  under 

275 


Economic  Moralism 

Capitalism.  It  is  inevitable.  The  nationalization 
of  retail  supply  is  just  as  important  for  the  reali- 
zation of  Economic  Moralism  as  that  of  railways, 
mines,  and  land,  and  every  encouragement  should 
be  given  to  municipal  and  co-operative  distribu- 
tive agencies  as  a  step  in  the  right  direction.  It 
can  easily  be  understood  how  it  is  absolutely  neces- 
sary in  the  ideal  system  for  the  Government  to 
know  both  the  requirements  and  the  resources  of 
society  or  how  useful  it  is  in  the  transition  period. 
By  the  national  organization  of  all  retail  business, 
a  complete  knowledge  of  the  requirements  of  the 
community  will  be  got.  With  the  State  as  practi- 
cally the  sole  retail  supplier,  all  producers  as  well 
as  all  consumers  will  get  into  touch  with  it,  specu- 
lative dealing  being  thereby  eliminated.  The  best 
economic  results  it  will  thus  be  possible  to  attain. 
With  the  consumers  secured,  it  will  be  an  easy 
step  to  nationalize  any  industry  and  conduct  it 
on  Moralist  lines,  as  laid  down  in  the  previous 
chapters.  It  will,  indeed,  only  be  after  the 
nationalization  of  retail  trade  that  the  national- 
ization of  agricultural  land  will  be  effective  in 
benefiting  consumers — the  mere  nationalization  of 
rent  is  a  comparatively  small  affair.  In  fact,  it  is 
only  after  retail  supply  is  nationalized  that  the 
nationalization  of  any  industry  can  be  effective  in 
benefiting  the  consumers  generally. 

If  before  arriving  at  this  point  there  should  be 
an  irresistible  movement  for  the  complete  and 
immediate    establishment   of   Economic    Moralism, 

276 


Transition  to  Economic  Moralism 

the   State  would  have  to  aim  at  getting  with  the 
greatest    possible   speed    a    full    return   of   all    the 
industrial    activities    of    the    nation  and    of   all    its 
requirements   of  services  and  of  material  wealth.1 
It  would  have  to  create  machinery  for  the  organ- 
izing of  all  industries  as  one  national  co-operative 
concern.     All  industrial   establishments,  large  and 
small,    owned  by   companies   or  private  persons — 
indeed,    every    branch    of    service    established    to 
supply   social  needs — would  have  to  be  linked  up 
together  in  guilds,  a  separate  guild  for  each  kind 
of  service  and  each  kind  of  product.     The  Govern- 
ment  would  have  to  establish  a  central  office  for 
each     guild     and     announce     to     all     proprietors 
of    industrial    concerns    that    they    must    affiliate 
themselves  together  through  such  guilds.      Finan- 
ciers  who    organize   trusts   and   combines   proceed 
on  similar  lines.      It  would  be  possible  to  collect 
the  necessary  information  from  these  proprietors. 
They  would  have  to  make  returns  as  correctly  as 
possible  of  the  number  of  their  employees  during 
the  previous  year  and  the  time  each  was  employed  ; 
of  the  actual  output  of  the  product  during  the  same 
period  and  its  destination  ;    of  the  price  and  quan- 
tity of  materials  bought  to  be  used  in  manufacture 
and  where  they  were  procured  ;   and  of  the  amount 
estimated  for  the  depreciation  of  tools,  machinery, 
and  buildings,  together  with  the  maximum  working 
capacity  and  actual  prime  cost  and  value  ;    also 

1  Just  as  it  has  done  this  during  the  War  in  connection  with 
a  large  proportion  of  the  nation's  industrial  activities. 

277 


Economic  Moralism 

periodic  returns  of  the  orders  received  and  being 
executed.  All  this  would  be  required  to  inform 
the  central  offices  of  the  community's  requirements 
and  resources. 

As  the  currency  would  have  in  due  course  to 
be  transformed  into  one  based  on  time,  and  all 
prices  and  values  expressed  in  terms  of  time, 
statistics  of  the  time  expended  in  production 
would  be  indispensable.  The  time  actually  worked 
by  the  employees  in  every  factory  and  workshop 
on  any  given  quantity  of  any  commodity  could  be 
ascertained  without  difficulty,  and  the  managers 
of  any  such  factory  could  estimate  the  time 
expended  in  producing  the  raw  materials  or  the 
machinery,  etc.,  used  up  in  such  production,  for 
they  could  get  the  figures  from  their  suppliers. 
Before  long  all  raw  material  and  machinery  would 
have  the  price  attached  to  it  in  terms  of  time,  as 
at  present  in  terms  of  gold.  But  at  the  beginning 
the  price  would  be  available  only  in  terms  of  gold. 
With  all  such  information  at  its  disposal  the  head 
office  of  each  guild  would  be  able  to  gauge  the 
demand  and  calculate  prices,  and  so  gradually 
regulate  industry  on  the  lines  laid  down  in  previous 
chapters. 

Besides  organizing  the  producers  according  to 
the  kind  of  article  produced  or  according  to  the 
kind  of  service  rendered,  including  in  each  industry 
all  the  various  kinds  of  workers  engaged  in  it, 
whether  engineers,  stokers,  mechanicians,  spinners, 
weavers,  or  clerks,  the  Government  would  have 
to  get   each  kind  of  worker  in  all  these  various 

278 


Transition  to  Economic  Moralism 

industries  organized  into  workers'  guilds,  one  for 
each  class  of  workers.  Thus  all  the  workers  in 
tweed  factories,  for  instance,  would  be  organized 
into  a  tweed  manufacturers'  guild,  and  each  kind 
of  the  various  workers  engaged  in  the  production 
of  tweeds  would  belong  also  to  its  own  workers' 
guild,  in  which  would  be  enrolled  members  of 
their  craft  engaged  in  other  industries.  There 
would  be  a  head  office  and  local  branches  for 
each   guild. 

The  Government  would  now  be  in  possession 
of  ample  statistical  information  regarding  supply 
and  demand  and  the  resources  of  the  country. 
As  has  been  stated,  it  would  be  necessary  for 
producers  to  mention  where  they  got  their  materials 
and  to  whom  they  sold  their  products,  for  special 
note  would  have  to  be  taken  of  the  export  and 
import  trades  with  other  countries  and  oversea 
possessions  for  the  following  reason  :  in  the 
police  regulation  of  industries  under  Capitalism 
and  their  management  during  the  transition  period, 
and  even  under  Moralism  itself,  special  care  must 
be  taken  to  avoid  injuring  foreign  trade,  unless 
speedy  compensating  benefits  are  certain  to  accrue, 
for,  as  has  been  indicated,  the  welfare  of  the 
workers  must  be  safeguarded. 

At  this  stage  everything  would  be  ready  for 
completely  socializing  industry.  The  edict  might 
go  forth  that  henceforward  no  dividends  would 
be  paid.  The  object  aimed  at  would  be  that  each 
industry  would  only  pay  for  labour  done,  and 
charge  for  the  products  only  the  price  of  the  total 

279 


Economic   Moralism 

labour  expended  in  their  production,  as  already 
explained.  The  result  would  be  that  owing  to 
the  abolition  of  rent  and  dividends  the  reduction 
to  approximately  half-price  of  all  commodities 
could  be  made.  But  at  the  introduction  of  the 
new  system  there  would  be  a  great  falling  off  in 
demand,  if  steps  were  not  taken  to  prevent  it. 
As  the  capitalists  would  be  deprived  of  their 
unearned  income,  their  personal  servants  would  be 
thrown  out  of  work,  and  all  those  who  had  been 
supplying  them  with  commodities  and  providing 
them  with  amusements,  and  performing  other 
services  for  them,  would  find  their  employment 
gone. 

How,  then,  could  work  be  found  for  the  unem- 
ployed? The  re'sult  of  the  cessation  of  dividends 
would  be  the  reduction  of  prices  on  all  commodi- 
ties. The  purchasing  power  of  wages  would  rise, 
and  more  services  and  more  commodities  would 
be  called  for  by  the  workers.  This  would  mean 
an  increased  demand  for  labour  and  almost  at 
once  all  the  unemployed  would  find  work.  The 
great  problem  would  be  solved. 

During  the  transition  period  the  policing  of  the 
capitalist  system  in  the  interest  of  the  community 
will  have  to  continue.  But  so  long  as  land  and 
capital  are  in  private  hands,  little  pecuniary  benefit 
can  accrue  to  the  workers  through  governmental 
intervention,  and  much  irritation  and  actual  though 
perhaps  only  temporary  loss  will  be  caused  the 
workers     by     State     interference     with     economic 

280 


Transition  to  Economic  Moralism 

arrangements  under  Capitalism.  Doubtless,  insist- 
ence on  sanitary  and  hygienic  arrangements  and 
on  reasonable  working  hours  would  have  a  very 
real  beneficial  effect,  but  the  advantages  of,  for 
instance,  a  statutory  minimum  wage  are  largely 
delusive.  If  increased  wages  be  secured  by  any 
body  of  workers,  these  workers  will  no  doubt  be 
benefited,  but  not  entirely  at  the  expense  of  the 
capitalist  class,  for  the  latter,  as  the  legal  owners 
of  the  wealth  produced  by  the  workers,  can  recoup 
themselves  by  charging  higher  prices.  As  about 
half  the  wealth  produced  is  consumed  by  the 
workers,  the  general  body  of  the  latter  have  them- 
selves to  provide  half  the  increase.  Therefore 
every  increase  obtained  by  a  trade  or  a  limited 
number  of  trades  is  got  half  at  the  cost  of  the 
capitalists  and,  what  is  a  very  serious  matter  for 
labour,  half  at  the  cost  of  the  whole  body  of 
workers.  Moreover,  such  increases  are  nearly 
always  got  by  well-organized  and  comparatively 
well-paid  workers  and  at  the  expense  of  the 
poorest  classes.  The  only  way  of  avoiding  this 
injustice  would  be  to  increase  wages  all  round, 
and  this  does  not  seem  feasible  under  Capitalism. 
Attempts  to  get  economic  benefits  for  the  workers 
under  Capitalism  are  for  the  most  part  delusive 
and  simply  block  the  way  to  Economic  Moralism, 
which  is  the  only  remedy. 

In  conclusion.  The  task  of  transforming  the 
present  iniquitous  and  chaotic  welter  of  society  into 
a  well-ordered  and  just  social  system  is  a  herculean 

281 


Economic   Moralism 

one  ;  but  the  human  will  and  intellect  has  in  other 
fields  overcome  difficulties  quite  as  great,  and  will 
in  like  manner  triumph  in  this,  and  carry  to 
completion  the  most  beneficent  work  man  has  ever 
undertaken.  In  these  chapters  the  moral  prin- 
ciples according  to  which  wealth  ought  to  be 
produced  and  distributed  have  been  expounded  with 
no  pretence  to  profundity  or  exhaustive  treatment, 
the  economic  framework  that  is  the  logical  outcome 
of  such  principles  has  been  sketched  in  broadest 
outline,  and  the  necessary  steps  for  its  realization 
hastily  traced.  These  subjects  will  more  and  more 
attract  the  attention  of  the  people,  and  especially 
of  thinkers,  as  being  above  all  others  the  most 
important  that  in  these  days  can  engage  the 
thoughts  of  men.  It  needs  no  prophetic  eye  to 
see  that  all  these  problems  will  ere  long  be 
discussed  in  the  greatest  detail  and  with  the  deepest 
and  truest  insight,  and  the  solution  made  clear 
to  the  whole  world. 


282 


Lest  we  forget  : — 

After  the  many  time-honor'd  and  really  true  things 
for  subordination,  experience,  rights  of  property,  &c,  have 
been  listen'd  to  and  acquiesced  in — after  the  valuable  and 
well-settled  statement  of  our  duties  and  relations  in  society 
is  thoroughly  conn'd  over  and  exhausted — it  remains  to 
bring  forward  and  modify  everything  else  with  the  idea  of 
that  Something  a  man  is  (last  precious  consolation  of  the 
drudging  poor),  standing  apart  from  all  else,  divine  in  his 
own  right,  and  a  woman  in  hers,  sole  and  untouchable  by  any 
canons  of  authority,  or  any  rule  derived  from  precedent, 
state-safety,  the  acts  of  legislatures,  or  even  from  what  is 
called  religion,  modesty,  or  art.  .  .  .  Underneath  the  fluctua- 
tions of  the  expressions  of  society,  as  well  as  the  movements 
of  the  politics  of  the  leading  nations  of  the  world,  we  see 
steadily  pressing  ahead  and  strengthening  itself,  even  in  the 
midst  of  immense  tendencies  towards  aggregation,  the  image 
of  completeness  in  separatism,  of  individual  personal  dignity, 
of  a  single  person,  either  male  or  female,  characterized  in 
the  main,  not  from  extrinsic  acquirements  or  position,  but 
in  the  pride  of  himself  or  herself  alone ;  and,  as  an  eventual 
conclusion  and  summing  up  (or  else  the  entire  scheme  of 
things  is  aimless,  a  cheat,  a  crash),  the  simple  idea  that 
the  last,  best  dependence  is  to  be  upon  humanity  itself,  and 
its  own  inherent,  normal,  full-grown  qualities,  without  any 
superstitious  support  whatever.  This  idea  of  perfect  in- 
dividualism it  is  indeed  that  deepest  tinges  and  gives 
character  to  the  idea  of  the  aggregate.  For  it  is  mainly 
or  altogether  to  serve  independent  separatism  that  we  favour 
a  strong  generalization,  consolidation.  .  .  . 

Walt  Whitman 


283 


INDEX 


Ability,  200,  201 

"  Abstinence  "  argument,  68 

Amusements,   145,    160,  229,    238, 

240 
Anti-usury  laws,  78 
Apprentices,  remuneration  of,   195, 

206 
Army,  22S,  229 
Art  galleries,  229,  246 
Artists,  209 
Authorship,  211 

Bain,  Alexander,  23 

Bank,  State,  159,  206 

Barker,  Ellis,  249 

Bellamy,  Edward,  86,  220 

Belloc,  Hilaire,  252,  258,  264 

Beneficence,  principle  of,  32,  51 

Bentham,  Jeremy,  22,  30 

Bequest,  right  of,  128,  151 

Biological  theory  of  State,  228 

Bismarck,  42 

Blatchford,  Robert,  86,  88 

Bbhm-Bawerk,  E.  V.,  71,  81 

Books,  145 

Breweries,  156 

British  industry,  inefficient,  249 

Ca'  canny  policy,  248 

Calvin,  81 

Canon  Law  and  usury,  79 

Capital,  depreciation  of,  145,  155 

Capital,  industrial,  128,  155 

Capital,  industrial,  renewal  of,  145, 

155 
Capital,  "  scrapping  "  of,  149 
Capitalism,  policing  of,  280 


Carriage  of  goods,  133,  135,  139 

Charity,  Christian  view  of,  202 

Christian  ethics,  75 

Christian  Fathers,  77,  90 

Church,  the,  229,  241 

Class  legislation,  43 

Clothing,  145 

Coal,  175 

Collective    ownership,    object     of, 

129 
Collectivism  during  the  war,  12 
Communism,  85  seqq. 
Communism,  definition  of,  99 
Communism,  drift  to,  9 
Communism  of  the  Middle  Ages,  93 
Compensation,  37,  256 
Compensation  to  landowners,  37 
Competition    as    ethical    regulator, 

43-57 
Competition  with  the  State,  147 
Conduct,  laws  of  right,  7 
Confiscation  of  property,  152,   156, 

255, 264 
Consumers'  influence,  142 
Co-operation,  voluntary,  48,  131 
Cunningham,  W.,  80 
Currency,  185,  193 

Dante,  79 
Death  duties,  151 
Democratic  principle,  5 
Distilleries,  156 

Distributing   agencies,    nationaliza- 
tion of,  275 
Domestic  work,  ineffective,  251 
Drainage,  228,  237 
Dwelling-houses,  128,  145,  153,  179 


285 


Index 


Economic  Moralism,   definition  of, 
98 

Economics,  constructive,  8,  24 
Education,  91,  104  seqq.,  229,  241 
Education,  technical,  201,  205,  207 
Effort  and  benefit,  relation  between, 

40 
"  Equal  division  of   unequal    earn- 
ings," 26 
Equality,  22 

Ethical  basis  of  economics,  19 
Ethical  end,  23 

Ethical  writers'  neglect  of  duty,  20 
Ethics,  first  principles  of,  19,  24 
Ethics,  absolute,  9,  25  seqq. 
Ethics,  relative,  10,  25  seqq. 

Factory  legislation,  252 

Families,  large,  158 

Farms,  135 

Fashion,  144 

Flint,  Professor,  76 

Food,  145 

Foreign  trade,  177,  184,  191,  270 

Fowler,  Professor,  20 

Free    education   and    maintenance, 

91,  104  seqq. 
Free  everything,  88,  91 
Free  tramways,  100 
Furniture,  145 

Gardens,  128,  228,  238 
George,  Henry,  72 
Gift,  right  of,  151 
Godwin,  William,  251 
Guilds,  130,  132,  148,  212,  279 
Guilds,  discipline  of,  212 
Guilds,  method  of  working,  134 
Guilds,  national  control  of,  132 
Guilds  to  hold  capital  in  trust,  132 

Happiness,  the  search  for,  23 
Happiness,     the    greatest,    01    the 

greatest  number,  23 
Hardie,  J.  Keir,  86,  89 
Heredity  33,  56 
Hobson,  John  A.,  71 
Hospitals,  218 
Household  expenses,  210 


286 


Implements,  146 

Income  tax,  26,  226 

Inefficiency,  industrial,  discouraged, 

142,  212 
Insurance,  209,  216 
Insurance,  death,  216,  222 
Insurance,  fire,  216,  223 
Insurance,  invalidity,  216,  217 
Insurance,  old  age,  216,  220 
Interest.     See  Rent 
International  property,  189 
International  rights,  184,  191 
Inventions,  211 

Justice,  15,  28,  29,  30,  33  seqq. 
Justice,  administration  of,  228,  230 

Kant's,  Immanuel,  categorical  im- 
perative, 30 
Kropotkiir,  Prince  Peter,  244 

Labour,  displacement  of,  258 
Labour,  remuneration  of,  141,   195, 

214 
Land,  128 

Land  nationalization,  273 
Landownership,  ancient,  36 
Landownership,  modern,  36 
Law  of  equal  freedom,  28,  29,  38,  44 
Law  of  equal  freedom  modified,  33, 

Law  of  preservation  of  species,  31 
Law  of  wages,  115 
Laziness,  203 
Liberty  of  demand,  131 
Libraries,  229,  245 
Life,  means  of,  24 
Lighting,  public,  228,  238 
Liquor  licences,  225 
Literary  men,  209 
Loan  interest,  81 

Local   public  councils,  their   func- 
tion, 141,  214 
Luther,  81 

MacDonald,  J.  Ramsay,  225 
Marriage,  210 

Marshall,  Professor  Alfred,  251 
Marx,  Karl,  74 


Index 


Means  of  production — 

Access  to,  in  the  past,  126 

Definition  of,  128 

Necessary  to  economic  indepen- 
dence, 126 

Object  of,  129 

Public  ownership  of,  125 
Medical  assistance,  218 
Melancthon,  81 
Menger,  Dr.  Anton,  93 
"  Might  is  right,"  7 
Mill,  John  Stuart,  30,  41,  66,  224 
Mines,  128,  264 
Mines,  nationalization  or,  269 
Minimum  wage,  252 
Morgan,  Lloyd,  57 
Morris,  William,  60,  86 
Museums,  229,  246 

National  defence,  228 
National  income,  present,  247 
Nationalization.     See  Land,  Mines, 

Railways 
Nationalization,  sham,  255,  263 
Natural  interest,  72 
Navy,  228 
Nietzsche,  F.,  23 
Novices,  remuneration  o,,  195,  204 

Owen,  Robert,  251 

Parable  of  the  talents,  78 

Parks,  228,  238 

Parliament,    function  of,   140,   150, 

214 
Pensions,  old  age,  220 
Pictures,  147 
Piece-work,  201,  204 
Poets,  209 
Police,  228,  230 
Pollock,  Sir  Frederick,  36 
Pope  Gregory  IX,  80 
Population,  increasing,  157 
Prices,  133,  135,  145,  155,  167,  176, 

187,  192 
Property,  private,  145 
Public  control  of  capitalist  industry, 

263 
Public  opinion,  pressure  of,  149 


Quarries,  128 

Railway  nationalization,  256,  259, 
264,  268 

Railways,  138,  170 

Ramsay,  Sir  William,  97 

Rent,  economic,  161,  163,  171,  178 

Rent,  interest,  and  profit,  40,  51,  60 
seqq.,  155,  159 

Reorganization  of  society,  immedi- 
ate, 254,  262,  276 

Reorganization  of  society,  gradual, 

255 
Reserve  funds,  158 
Right  of  property,  27,  38 
Right  to  live,  24 
Right  to  the  use  of  the  earth,  38 
Right  to  work,  145,  215 
Rights  to  the  uses  of  natural  media, 

.35 
"  Risk  "  argument,  67 
Roads,  117,  228,  233 
Robertson,  J.  M.,  71 
Ruskin,  John,  65,  83 

St.  Paul,  66 

Salaries,  high,  266 

Sale,  right  of,  146 

Sanitation,  228,  238 

Saving,  private,  154,  159,  251 

Scientific  research,  220,  229,  242 

Scientists,  200,  209 

Security  against  economic  evils,  258 

Self-sacrifice,  94 

Shaw,  George  Bernard,  266 

Sidgwick,  Professor  Henry,  70 

Sillar,  W.  C,  64 

Smith,  Adam,  66,  81,  227 

Socialism,  85  seqq. 

Socialism,  fatalistic,  8 

Solvitur  ambulando,  8 

Spencer,  Herbert,  8,  24,  26  seqq. 

State   endowment   of  motherhood, 

State  interference,  Spencer's  view, 

45 

State  and  internal  aggression,  47 
State  monopoly,  147 
Statistics  of  demand,  129 


287 


Ind 


ex 


Stewardship,  Christian  doctrine  of, 

202 

Stores,  134 
Strikes,  214,  251 
Supply,  certainty  of,  144 

Tax,  income.     See  Income  tax 
Tax,  land,  227 

Taxation,  145,  152,  217,  224 
Taxation,      Ramsay      MacDonald's 

theory,  225 
Taxation,  illegitimate,  229 
Taxation,  legitimate,  228 
Theatres,  158 

Thomson,  J.  Arthur,  32,  56 
Tools,  146 
Towns,  economic  justification,  131, 

167 
Trade,  bad,  130,  251 
Tramways,  100,  138 
Transition  period,  247 
Travel,  145 
"True  equivalent  "  for  services,  41, 

50,  211 


Unemployment,  25S 
Usury,  61 

Valuation,  comparative,  o»  services, 

199,  201 
Vehicles,  146,  235 

War,  the,  7,    12,   248,    251,    262, 

277 
Waste,  250 
Water-power,  128 
Water  rates,  136 
Wells,  H.  G.,  94 
Whitman,  Walt,  5,  16,  283 
Women,    (remuneration     of,     195, 

209 
Work  for  all,  129 
Work,  free  choice  of,  197 
Work,  pleasurable  and  disagreeable, 

198 
Work,  the  unfit  for,  145 
Working-day,  209,  252 

i  Zwingli,  81 


Printed  in  Great  Britain  by 

UNWIN  BROTHERS,  LIMITED,  THE  GRKSHAM   PRESS,  WOKING   AND  LONDON 


This  book  is  DUE  on  the  last  date  stamped,  below 


JUL  2     194? 
0EC26  1951* 
MAY  18  1982 


Form  L-9-15m-7,'32 


389   Smith  - 
365 e  Economic 
moralism. 


SOUTHERN  REGIONAL  LIBRARY  FACILITY 


AA    000  788  866    2 


JNV 


PORN  1  a 


IBAKY 


